GB: Halifax HPI

Thu Dec 07 02:30:00 CST 2017

Consensus Actual Previous
M/M % change 0.2% 0.5% 0.3%
Yr/Yr % change- 3 mo moving av 3.9% 3.9% 4.5%

The Halifax's latest survey found house prices rising a monthly 0.5 percent in November. This was up from 0.3 percent in September and stronger than market expectations. It was also the fifth straight gain, albeit not enough to prevent annual HPI growth in the last three months from sliding from 4.5 percent to 3.9 percent, its lowest mark since June-August.

That said, quarterly growth edged a tick firmer to 2.4 percent, its fifth increase since bottoming at minus 0.2 percent in March-May. Recent housing market data have been mixed with home sales hitting a new monthly high in October but buyer enquiries down again and mortgage applications declining for a third consecutive month. Crucially however, supply continues to be very tight with new instructions falling consistently in the twenty months to October.

The Halifax's report is stronger than the 0.1 percent monthly gain posted by the Nationwide's November HPI but both surveys remain consistent with a soft landing for UK house prices.

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.