GB: Halifax HPI


Mon Apr 09 02:30:00 CDT 2018

Consensus Actual Previous Revised
M/M % change 0.1% 1.5% 0.4% 0.5%
Yr/Yr % change- 3 mo moving av 2.1% 2.7% 1.8%

Highlights
UK house prices were surprisingly robust last month according to the latest survey from the Halifax. A 1.5 percent increase in the lender's HPI equalled the sharpest monthly increase since December 2016 and that after an upwardly revised 0.5 percent rise last time.

Even so, the first quarter still saw prices dip 0.1 percent versus the fourth quarter of 2017. This was an improvement over the comparable minus 0.7 percent rate recorded in February but still indicative of a soft underlying trend. That said, an annual 2.7 percent first quarter inflation rate was nearly a full percentage point above the previous period's outturn and the highest since the three months to November 2017.

Still, with the latest figures showing flat sales and mortgage approvals some 7 percent lower on the year, market activity remains subdued. Crucially, prices continue to benefit from the shortage of supply - the number of new instructions has now fallen for twenty-four consecutive months, the worst sequence for nine years. The unsold stock is at a record low and new buyer enquiries have declined for eleven straight months.

Today's findings are a good deal stronger than the 0.2 percent monthly decrease shown in the Nationwide's March survey although the gap in the annual rates (Nationwide 2.1 percent) is not particularly wide. The Halifax still expects house price inflation of around 3 percent over calendar 2018.

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.