GB: Halifax HPI


Mon Jan 09 02:30:00 CST 2017

Consensus Actual Previous Revised
M/M % change 0.3% 1.7% 0.2% 0.6%
Yr/Yr % change- 3 mo moving av 5.8% 6.5% 6.0%

Highlights
The housing market ended 2016 on a surprisingly strong note according to the new Halifax survey. A 1.7 percent monthly increase in the lender's HPI was well above market expectations and the largest since March. The jump put fourth quarter prices 6.5 percent above their level a year ago, up from 6.0 percent in September - November and the second consecutive acceleration from the recent low of 5.2 percent.

The quarterly increase was a very solid 2.5 percent, also easily the best performance since March and a sharp pick-up on the 0.9 percent rate posted last time. Supply shortages continue to be a major factor underpinning house price inflation but record low mortgage rates have also contributed via a recovery in mortgage approvals (up 6 percent in the three months to November).

The Halifax sees house prices rising between 1 percent and 4 percent at the end of this year as higher CPI inflation erodes households' real disposable incomes and Brexit uncertainty has more of a negative impact.

Definition
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.

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.