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08-10-2014, 09:26 PM
UK house price growth loses steam: Halifax
DOW JONES NEWSWIRES OCTOBER 08, 2014 8:15PM
House prices in the UK continued to rise in September but at a slower pace, a survey from building society Halifax showed on Wednesday.
According to the lender, which is owned by Lloyds Banking Group, British house prices grew by 9.6 per cent compared with September 2013, down from 9.7 per cent in August. However, prices still went up by 0.6 per cent in monthly terms, meaning that the average house rose by £1,087 ($US1,750) to £187,188 between August and September.
These figures indicate the housing market in the UK remains strong, underpinning consumer confidence and driving households to spend more, but at the same time ease concerns of a housing bubble flagged by the Bank of England earlier this year.
Martin Ellis, housing economist at Halifax, highlighted that stagnating salaries and the possibility of an early rise in interest rates have helped to slow an overheated market.
"A moderation in growth looks likely during the remainder of 2014 and into next year, as supply and demand become increasingly better balanced," he said.
The trend suggested by Halifax confirms figures from other lenders: Nationwide house price data for September pointed to an even larger moderation and showed a 0.2 per cent monthly drop in house prices, the first since April 2013.
Contributing to the slowdown are tighter rules imposed on lenders during the first half of 2014 that have led to a fall in mortgage approvals for house purchases. According to the BOE's quarterly survey of credit conditions, released Tuesday, banks and building societies were less willing to extend riskier loans during the third quarter of the year.
However, there are signs that buyer interest has ebbed, regardless of tighter credit conditions.
"The fact that mortgage approvals currently remain limited compared to early-2014, after lenders have now likely got to grips with the new mortgage regulations, suggest that there has been some underlying moderation in housing market activity," said Howard Archer, economist at IHS Global Insight.
The British housing market is still expected by analysts to keep rising, as wages are set to start growing in 2015 and banks are likely to expand lending to creditworthy home buyers in the near future, according to the BOE survey.
DOW JONES NEWSWIRES OCTOBER 08, 2014 8:15PM
House prices in the UK continued to rise in September but at a slower pace, a survey from building society Halifax showed on Wednesday.
According to the lender, which is owned by Lloyds Banking Group, British house prices grew by 9.6 per cent compared with September 2013, down from 9.7 per cent in August. However, prices still went up by 0.6 per cent in monthly terms, meaning that the average house rose by £1,087 ($US1,750) to £187,188 between August and September.
These figures indicate the housing market in the UK remains strong, underpinning consumer confidence and driving households to spend more, but at the same time ease concerns of a housing bubble flagged by the Bank of England earlier this year.
Martin Ellis, housing economist at Halifax, highlighted that stagnating salaries and the possibility of an early rise in interest rates have helped to slow an overheated market.
"A moderation in growth looks likely during the remainder of 2014 and into next year, as supply and demand become increasingly better balanced," he said.
The trend suggested by Halifax confirms figures from other lenders: Nationwide house price data for September pointed to an even larger moderation and showed a 0.2 per cent monthly drop in house prices, the first since April 2013.
Contributing to the slowdown are tighter rules imposed on lenders during the first half of 2014 that have led to a fall in mortgage approvals for house purchases. According to the BOE's quarterly survey of credit conditions, released Tuesday, banks and building societies were less willing to extend riskier loans during the third quarter of the year.
However, there are signs that buyer interest has ebbed, regardless of tighter credit conditions.
"The fact that mortgage approvals currently remain limited compared to early-2014, after lenders have now likely got to grips with the new mortgage regulations, suggest that there has been some underlying moderation in housing market activity," said Howard Archer, economist at IHS Global Insight.
The British housing market is still expected by analysts to keep rising, as wages are set to start growing in 2015 and banks are likely to expand lending to creditworthy home buyers in the near future, according to the BOE survey.