| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.2% | 0.8% | -0.2% | 0.0% |
| Year over Year | 2.3% | 1.6% | 1.9% |
Highlights
Having been unchanged in each of the previous three months, house prices regained some momentum in July. A surprisingly large 0.8 percent rise versus June was the steepest increase since January and enough to boost the annual inflation rate from 1.9 percent to 2.3 percent. The only region to record an annual fall was Eastern England where prices dropped 0.4 percent and the average UK house price is now £291,268.
Less promisingly, the 3-monthly change was only 0.0 percent, albeit up from minus 0.4 percent in the second quarter, so the underlying trend remains flat. Still, despite affordability constraints, declining mortgage rates and last week's cut in Bank Rate mean that the Halifax anticipate a modest inflation rate over the rest of the year.
More generally, today's update puts the UK RPI at 14 and the RPI-P at 10, indicating overall economic activity slightly outpacing market expectations.
Less promisingly, the 3-monthly change was only 0.0 percent, albeit up from minus 0.4 percent in the second quarter, so the underlying trend remains flat. Still, despite affordability constraints, declining mortgage rates and last week's cut in Bank Rate mean that the Halifax anticipate a modest inflation rate over the rest of the year.
More generally, today's update puts the UK RPI at 14 and the RPI-P at 10, indicating overall economic activity slightly outpacing market expectations.
Market Consensus Before Announcement
Prices are seen rising 0.2 percent on the month, unwinding June's surprise decline.
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 the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.
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.
