The latest House Price Index from high street lender the Halifax has revealed that prices in the three months to September were 0.5% lower than in the preceding three months. In September, house prices fell by 0.4%. This was the third consecutive monthly fall. But overall, house prices have remained static in 2012 and are reportedly 1.2% down year-on-year.
At present, the average house price stands at £159,486, slightly lower than the figures for July and August. In September 2011, the average house price was £161,246. The average house price in September 2012 was calculated to be 0.3% lower than in December 2011, at £159,888.
The latest data produced by Halifax is largely in agreement with figures produced by Nationwide. Their September House Price Index found that the price of a typical UK property dropped by 0.4%. However, they calculated the average house price to be £163,964.
Martin Ellis, housing economist at the Halifax, said: “Overall, there has been very little change in the average UK house price so far this year. There is, nonetheless, evidence of a slight deterioration in the trend recently with prices in the three months to September 0.5% lower than in the previous quarter.
The generally weak economic climate remains a significant constraint on housing demand. The relatively low level of mortgage payments in relation to income, however, continues to provide support for house prices. We expect house prices to be broadly unchanged over the rest of this year and into 2013.”
There is good news as well. Mr Ellis said that the low level of mortgage payments in relation to earnings is currently supporting house prices. Mortgage payments for new borrowers are significantly below the long term average as a proportion of disposable earnings. The Halifax found that in the third quarter of 2007, mortgage repayments for new borrowers (first time buyers and home movers) accounted for 48% of disposable earnings, compared to 26% in the first quarter of 2012. The long term average (recorded over the past 27 years) is 36%.
Activity in the market was described as “subdued but stable”. Property sales have been stable in recent months, at between 75,000 and 77,000 per months between May and August. Overall, sales in the three months to August were 3% higher than in the same period in 2011 according to HMRC.
Sources: Property Wire, Halifax.