House Price Growth Slows According to Halifax

The latest house price index released by Halifax indicates property prices are remaining flat overall. The annual rate of growth was shown as 2.2% in January; however, this dropped to 1.8% in February. That figure was also confirmed as the lowest growth rate in house prices since March 2013. The month-by-month picture was slightly more pleasing, with a rise of 0.4% in house prices in February. This bucked the trend of two consecutive falls in prices over the previous two months. Last November had seen a high point of £226,408 as the average house price. However, February’s average figure was confirmed as £224,353 – a difference of £2,055. Will spring see the housing market springing back into action? There is often a better outlook as spring arrives, after a sluggish winter. However, the evidence from the Halifax House Price Index seems to indicate things may take a while longer to find their feet this year. Market uncertainty is still rife, and although more people are finding work and a rise in wages has been noted, consumer prices are adding to a cautious outlook. Fewer new instructions confirmed for yet another month Perhaps more concerning is the lack of new instructions coming onto the housing market. The latest data confirms February is the 23rd month in a row where the number of instructions has fallen compared with the previous month. The market hasn’t seen such figures since the period between 2007-2009. “The housing market is still sluggish at present, and this mix of figures confirms that,” said Darren Pescod, CEO of The Mortgage Broker Limited. “Even though we saw a recent rise in the base rate from the Bank of England, mortgage rates are still at historic lows. Yet plenty of people seem hesitant to consider moving or trying to get onto the housing ladder. The mix of conditions we are currently seeing has led to suppressed house prices. “While we did see a slight rise in prices month on month, it is just that – only a slight rise. A lot of people seem to be playing a ‘wait and see’ game – perhaps because of the talk of another base rate rise coming soon. However, interest rates on mortgages are still very low. People have an excellent chance to lock in a good deal over two or more years – something that might be worth thinking about. There is a chance the longer people wait to buy a property, the higher those interest rates could go.” Seasonal fluctuations are a key part of the housing market. Winter tends to be a sluggish season. The bad weather is lingering too, and this could be another factor contributing to the prolonged lull in the housing market at present. However, there are signs more sellers are starting to have their properties listed for sale. Experts say interest from would-be buyers is beginning to perk up too. There is a chance we could be heading into a more promising summer, which could see house prices perk up a little too.