Property monitor - November
Whatever the colour of your house, its price is probably rising at the moment
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Monday, 11, Dec 2006 11:15
We take a look at the most recent property price indicators to let you know the current state of the British housing market.
The British housing market is continuing its robust progress this autumn, fuelled by high demand and limited supply.
Most of the house price indices (HPI) listed below have shown continuing rises, although many are indicating that the market is starting to show signs of weakness, likely to lead to a slowdown.
Analysts have been predicting an eventual slowing of the rate of growth for most of the autumn but the effect of August's interest rate rise, and November's also, have yet to make their presence felt on November's upwardly-spiralling property prices.
As a result the timing of the anticipated dampening remains a matter for speculation. Although most agree that it will occur sometime next year, precisely when remains anybody's guess.
Below are a selection of house prices and indices designed to show the current state of the British property market, along with each resident experts' take on the future of house prices in Britain.
Halifax HPI
November: Up 1.7 per cent month-on-month, 9.6 per cent year-on-year. Monthly rate unchanged, but annual rate accelerated from 8.6 per cent last month.
"The marked slowing in real average earnings growth over the past six months, and a squeeze on households' discretionary income due to the substantial increase in utility bills during the last year, should temper housing demand," Halifax's chief economist, Martin Ellis, predicted.
Nationwide HPI
November: Up 1.4 per cent month-on-month, 9.6 per cent year-on-year. A big increase in November from last month's rise of 0.7 per cent, with the market showing "significant momentum".
"A sustained period of rapid house price growth when affordability is stretched automatically leads to speculation about when prices may begin to fall. Research papers from two respected camps have warned that a market correction cannot be ruled out, although the precise timing cannot be predicted," Fionnuala Earley, Nationwide's group economist, said.
Rightmove HPI
November: Up 1.5 per cent month-on-month, two per cent year-on-year. Stretched homemovers face further affordability challenges, as the market's strong performance continues.
"With the northern housing markets already stabilising, and the south being driven ever higher by shortage of supply, the interest rate rise can only add to the cost of home ownership," Miles Shipside, commercial director at Rightmove, said.
Hometrack HPI
November: Up 0.4 per cent month-on-month, 4.9 per cent year-on-year Price growth across London and the south-east is sustaining the fastest rate of growth for over two years.
"A lack of housing for sale combined with high levels of demand lie behind London's price growth although there are growing signs of a slow down," commented Richard Donnell, Hometrack's director of research.
Royal Institute of Chartered Surveyors (Rics) housing market survey
October: 48.1 per cent more chartered surveyors reported rise rather than fall, up from 45.1 per cent in September. House price growth reaches its fastest rate in over four years.
"The market is unlikely to feel cold winds from high finance costs until mid-year at the earliest as economic conditions are favourable," Rics spokesperson Ian Perry said.
British Bankers' Association (BBA) mortgage lending
October: Gross mortgage lending of £18.9 billion up six per cent month-on-month, eight per cent year-on-year. Remortgaging helps overall lending, reversing 14 per cent month-on-month fall in September.
"The secured lending market undoubtedly remains robust, but after discounting price growth, lending volumes are not dissimilar to the same time last year," the BBA's director of statistics, David Dooks, forecast.
Council of Mortgage Lenders (CML) mortgage lending
October: Gross mortgage lending of £29.2 billion up four per cent month-on-month and 12 per cent year-on-year. Gross lending hits new monthly record.
"House price growth is. strong, so we expect to see lending remaining at high levels through the new year. But with interest rates rising for the second time in three months, we anticipate a modest slow down in house sales and mortgage approvals as 2007 progresses," Michael Coogan, CML director-general, predicted.
Department for Local Communities and Government (DCLG) HPI
September: Annual house price inflation at eight per cent, up from 7.4 per cent in August. Growth in last quarter up to 7.1 per cent from 6.3 per cent. London prices driving national market growth.
"In the home countries in September, England, Scotland and Wales saw increases in inflation, while inflation fell in Northern Ireland," the DCLG stated.
Land Registry
Third quarter 2006: Up 6.3 per cent year-on-year, 1.3 per cent month-on-month. Average house on the UK market currently priced at £169,569.
The next update of the InTheNews.co.uk property monitor will appear here on Monday 8th January.