GB: Halifax HPI


Thu Jan 08 02:00:00 CST 2015

Consensus Actual Previous Revised
M/M % change 0.3% 0.9% 0.4% 0.5%
Yr/Yr % change- 3 mo moving av 7.6% 7.8% 8.2% 8.1%

Highlights
House prices ended 2014 on a surprisingly firm note according to the new Halifax survey. A 0.9 percent monthly rise in the lender's HPI was the steepest since July and followed an upwardly revised 0.5 percent increase in November. Over the last three month prices were 7.8 percent higher on the year, just three ticks below their mid-quarter pace but well short of the peak rate of 10.2 percent seen in July.

In fact, the fourth quarter advance in prices was just 0.5 percent, down sharply versus the previous period's 0.8 percent gain and the fifth consecutive monthly deceleration. The cooling in prices is consistent with a number of other indicators all pointing to moderating housing activity. In particular, mortgage approvals in November (59,029) were some 23 percent below their level at the start of the year and ratio of house sales to the stock of unsold properties has now fallen for four months in a row.

While remaining positive, annual house price inflation is expected to slow further over coming months and the Halifax is forecasting a 3-5 percent range for calendar 2015.

Definition
Halifax House Price Index is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The Index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month.

Description
Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.