|M/M % change||-0.1%||-0.2%||-1.0%||-1.1%|
|Yr/Yr % change- 3 mo moving av||7.0%||6.9%||8.4%|
The Halifax's latest survey shows UK house prices falling just 0.2 percent on the month in August. The decline, which was much as expected, followed a marginally steeper revised 1.1 percent drop in July and reduced the annual change in the lender's HPI over the last three months from 8.4 percent to 6.9 percent, the lowest mark since October 2013.
In the three months to August, the best guide to underlying trends, the HPI was up 0.7 percent, less than half the rate posted in July and the weakest print since December 2014. The quarterly rate has been on a declining trend since peaking in February at 3.0 percent.
Today's results suggest that the housing market is cooling although falling demand - July mortgage approvals declined to their lowest level since January 2015 continues to compete with highly restricted supply new instructions by home sellers fell for a fifth consecutive month in July. Supply constraints have been a key factor cushioning prices so far in 2016 and look likely to remain so over the rest of the year. Indeed, the Halifax data contrast with the Nationwide's August report released last week which showed its HPI 0.6 percent higher on the month (and 5.6 percent stronger than a year ago). Brexit may be having an effect but so far talk of a collapse in house prices looks overblown.
The Halifax House Price Index (HPI) 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. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and methodology remain unchanged.
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.
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