GB: Halifax HPI


Wed Feb 07 02:30:00 CST 2018

Consensus Actual Previous Revised
M/M % change 0.2% -0.6% -0.6% -0.8%
Yr/Yr % change- 3 mo moving av 2.4% 2.2% 2.7%

Highlights
House prices began 2018 on an unexpectedly soft note according to the Halifax's latest survey. A 0.6 percent monthly fall in the lender's January HPI compounded a 0.8 percent drop at the end of last year to reduce annual house price inflation over the last three months to 2.2 percent from 2.7 percent in the fourth quarter.

The 3-monthly change, normally seen as the best underlying gauge, eased from 1.3 percent to just flat, its weakest outturn since May-July 2017.

The Halifax's findings contrast with those from the Nationwide which showed prices up 0.6 percent on the month in January and 3.2 percent higher than a year ago. However, both companies still see the 2018 housing market outlook being underpinned by a combination of very tight supply, a strong labour market and, despite last November's BoE tightening, near record low mortgage rates.

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.