GB: Halifax HPI

Fri May 08 02:00:00 CDT 2015

Consensus Actual Previous Revised
M/M % change 0.3% 1.6% 0.4% 0.6%
Yr/Yr % change- 3 mo moving av 7.8% 8.5% 8.1%

The latest Halifax survey suggests that house prices recovered considerable momentum in April. A 1.6 percent monthly increase in the lender's HPI lifted annual house price inflation for the last three months from 8.1 percent to 8.5 percent, its highest mark since January.

On a monthly basis prices are notoriously volatile and the quarterly change is normally seen as providing a more reliable guide to underlying trends. To this end, and despite April's bounce, the HPI over February-April was up 2.2 percent versus the previous period, some 0.4 percentage points short of its comparable March rate.

With mortgage rates at record lows, employment growth still robust, consumer confidence elevated and supply tight, housing market fundamentals remain strong. Nonetheless, prices are rising more quickly than earnings and so some further trend slowdown in market activity looks likely over the rest of the year. That said, today's surprise general election result could well provide something of a near-term lift.

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.

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.