GB: Halifax HPI

Mon Aug 07 02:30:00 CDT 2017

Consensus Actual Previous Revised
M/M % change 0.3% 0.4% -1.0% -0.9%
Yr/Yr % change- 3 mo moving av 2.1% 2.1% 2.6%

According to the new Halifax survey house prices rose a fractionally stronger than expected 0.4 percent on the month in July. The increase followed a marginally smaller revised 0.9 percent drop in June and put the annual (3-month) inflation rate at 2.1 percent, down from 2.6 percent last time.

Despite July's rebound, the lender's HPI was still 0.2 percent lower over the latest three months, its fourth consecutive quarterly decline but in line with the outturns in both April and May. Downward pressure on prices from falling demand - home sales are at their lowest level since last October continues to be resisted by supply shortages with new instructions declining for a sixteenth consecutive month in June. Average stock levels on estate agents books are at an all-time low.

Today's Halifax report paints much the same picture of the housing market as the Nationwide's survey released at the end of July. This found prices rising 0.3 percent versus June and 2.9 percent from a year ago. With mortgage approvals holding within a relatively tight range in recent months, the chances are that house prices will be broadly flat over the rest of the quarter.

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.