GB: Halifax HPI


Mon Jan 08 02:30:00 CST 2018

Consensus Actual Previous Revised
M/M % change 0.2% -0.6% 0.5% 0.3%
Yr/Yr % change- 3 mo moving av 3.3% 2.7% 3.9%

Highlights
The Halifax's latest survey found house prices unexpectedly declining in December. A 0.6 percent monthly drop in the lender's HPI followed a downward revised 0.3 percent increase in November and was the first fall since June. Over the fourth quarter, prices were up an annual 2.7 percent, down from 3.9 percent in the three months ending November and the lowest outturn since June-August.

The quarterly change in prices was still positive at 1.3 percent but this too was the weakest performance in five months and compares with a 2.9 percent rate in the same quarter a year ago. The slowdown reflects sluggish demand with activity hit by a combination of Brexit uncertainty and squeezed household budgets. Nonetheless, the trend in house prices remains at least modestly up in respect of persistently tight supply due to a shortage of properties for sale and low levels of construction.

Today's Halifax data contrast with the 0.6 percent monthly rise shown in the Nationwide's December survey but at 2.6 percent, the latter's annual growth rate is much the same. Halifax forecast a yearly increase in house prices in 2018 of 0-3 percent and the Nationwide of around 1 percent so a soft landing is expected by both.

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.