Halifax turns more upbeat on UK house price outlook

LONDON Wed Mar 6, 2013 9:31am GMT

A woman walks past houses on a street in London March 13, 2012. REUTERS/Luke MacGregor

A woman walks past houses on a street in London March 13, 2012.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - Britain's biggest mortgage lender reported a sharper-than-expected rise in house prices on Wednesday and said it was more positive about the outlook for the market for the rest of the year.

Halifax, part of the HBOS group, said house prices were 1.9 percent higher in the three months to February than a year ago, the third successive increase in this measure.

Prices were 0.5 percent higher than in January.

"The underlying trend is more positive, both in terms of prices and activity," Halifax chief economist Martin Ellis told Reuters.

"We were previously forecasting flat prices over 2013. Now I'd expect growth in the low single digits."

The mortgage lender said Britain's resilient labour market was helping to support prices, as was the Bank of England's "Funding for Lending" scheme which helps banks borrow more cheaply.

Figures show that while the scheme has not had much success in providing funds to small and medium-sized companies, it has helped increase the availability and affordability of mortgages.

Nevertheless, housing turnover remains little more than half its peak level of 2007, and weak income growth is likely to cap price gains for the time being.

"While it is looking increasingly possible that house prices could eke out a modest gain over 2013, it remains hard to see house prices making any decisive move upward," said Howard Archer at Global Insight.

Figures from rival lender Nationwide last week showed house prices rose 0.2 percent in February after a 0.5 percent rise in January.

(Reporting by Christina Fincher; Editing by Catherine Evans)

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Comments (3)
uksimon wrote:
Possible, but there have been a number of national chains closing recently, and other signs of industry closing in local industrial parks. That and word of mouth suggest that even if there’s a recovery shortly, recent events have yet to play their part.

I’m holding off for now as further decline is inevitable. We read this spin routinely and have done for years now, yet the reality is far from the flashy headlines.

Mar 06, 2013 10:07am GMT  --  Report as abuse
GlobalFamily21 wrote:
That is only for a short period of time.

Mar 06, 2013 1:54pm GMT  --  Report as abuse
MasterB wrote:
The problem with the Halifax HPI is that it’s based on limited mortgage data. Low transaction levels mean the sample size varies wildly and only represents a small percentage of the market. Furthermore Halifax does not take into account cash purchases or fall through rates ( see http://www.quickmovenow.com/blog/2013/02/quick-move-now-house-sale-fall-through-index-q4-2012/ )

Forgive my cynicism but it’s very hard to draw any encouragement from data which is not accurate of actual house sales on a national level.

Mar 11, 2013 2:17pm GMT  --  Report as abuse
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