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UK house prices rose by 3.9 per cent in the year to November, lender Halifax said on Thursday, marking a moderation from the 4.5 per cent pace in the previous month, but still leading economists to question whether the data give a good reflection of the nation’s property market.
Prices rose 0.5 per cent on the month, Halifax said, and 2.4 per cent from September to November, from the previous three-month spell – the fastest growth on that measure since January. The year-on-year decline was the first since July.
Russell Galley at Halifax said the lack of new homes hitting the market remains a support to prices – a pattern that he said “doesn’t look like changing in the near future”.
Banging a familiar drum, Pantheon Macroeconomics’ Sam Tombs said the strength of the Halifax index was “not matched by other measures”:
Halifax’s suggestion that house prices are surging again conflicts with virtually every other indicator we track. Halifax reports that house prices were 2.4 per cent higher in the three months to November than in the previous three months. The equivalent growth rates for Nationwide’s measure and our seasonally adjusted version of Rightmove’s data are just 0.6 per cent and 0.1 per cent, respectively. The Nationwide and Rightmove measures have been much less volatile than Halifax’s in the past and they chime with surveys from RICS and NAEA indicating weakening new buyer demand. As a result, we remain inclined to place much more weight on the Nationwide and Rightmove measures.
Howard Archer at EY Item Club also said:
The recent contrast between the Halifax and Nationwide data highlight the fact that house price measures can be volatile and differ from month to month between reporting agencies. It is therefore best not to attach too much importance to one particular survey but to try and take an overview.
[We believe] that there is unlikely to be a significant upturn in housing market activity any time soon. Housing market activity is being pressurized by weakened consumer purchasing power and substantial consumer wariness over engaging in major transactions. Potential house buyers may also be concerned by the Bank of England hiking interest rates early in November.