How much?
Unprecedented house price growth is restricting sales
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Monday, 09, Oct 2006 11:09
We take a look at the most recent property price indicators to let you know the current state of the British housing market.
The market is continuing to accelerate as high demand overpowers the dampening effect of August's interest rate rise.
Most of the house price indices listed below have shown continuing price rises, but some are beginning to indicate that the rate of growth is slowing.
Despite the current sustained growth, experts believe that a natural market correction is currently taking place. Prices are hitting a ceiling which could begin to slow demand.
August's interest rate rise, and the expectation of another in November, are likely to help cause a gradual slowdown in the run-up to Christmas, they argue, but recovering consumer confidence and lower utility costs could reduce the dampening effect.
You don't need to believe them, however, take a look at the figures for yourself.
The five main house price indices (HPI), each with the price change from their previous assessments, are listed below. Also included is the quarterly Land Registry monitor, the most accurate of all but only dealing with the period up to June, and two indicators of mortgage lending levels.
Department for Local Communities and Government (DCLG)
August: Annual house price inflation at 7.7 per cent. Monthly increase of 1.6 per cent.. High demand and limited supply in some areas causing pickup in market.
A DCLG spokesperson said: "The rise in UK prices between July and August can be attributed to rises in average prices for bungalows (5.1 per cent), detached houses (3.2 per cent), flats (1.6 per cent), and semi detached houses (one per cent)."
Hometrack
September: Up 0.4 per cent month-on-month, 4.3 per cent year-on-year. Supply constraints maintaining price rises.
"Despite the [interest] rate increase in August, house prices continue to rise as we start the autumn selling season," said Richard Donnell, Hometrack director of research.
Halifax
September: Average prices up one per cent month-on-month, eight per cent year-on-year. Warning of house price moderation for rest of year issued.
Commenting, Martin Ellis, Halifax chief executive, said: "We expect increased utility bills and higher interest rates to curb housing demand over the coming months, causing annual house price inflation to ease between now and the end of the year."
Nationwide
September: Growth measured at 1.3 per cent month-on-month and 8.2 per cent year-on-year. August's rate hike not making the slightest difference to house prices.
"Just like the weather, the housing market was unseasonably warm in September as August's interest rate hike did nothing to cool the rate of house price inflation," explained Fionnuala Earley, Nationwide group economist.
Rightmove
September: A rise of 0.2 per cent month-on-month, 9.8 per cent year-on-year.
British Bankers' Association (BBA) mortgage lending
August: Gross mortgage lending up nine per cent month-on-month, 24 per cent up on August 2005. Total lending up thanks to house price rises but overall volumes stable.
"The ongoing weak appetite for consumer credit, driven by a further reduction in credit card lending, continued in August," said BBA director of statistics David Dooks.
Council of Mortgage Lenders (CML) mortgage lending
August: Gross mortgage lending up 7.2 per cent month-on-month, 21 per cent up on August 2005.
"Record lending in August reflects the rise in mortgage approvals during the early summer combined with increasing house prices," revealed Michael Coogan, CML director general.
Royal Institute of Chartered Surveyors (Rics) market survey
August: Thirty-five per cent more chartered surveyors report rise rather than fall. Housing market accelerating at fastest rate since May 2004.
A spokesperson said: "Rics estate agents reported that price rises are being driven by a combination of would-be buyers returning to the market and limited availability of new property coming onto the market."
Land Registry
2ND quarter 2006: Up 7.7 per cent year-on-year. Average house on the UK market now costing nearly £200,000.
What the experts say.
"We suspect that house prices will increasingly be reined in by affordability constraints and will settle down into an extended period of relatively modest rises," explained Howard Archer of research firm Global Insight.
While Ed Stansfield, property economist for Capital Economics, added: "The pace of house price growth should ease back in the final months of the year."