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GB: Halifax House Price Index
| Actual | Previous | Revised | |
| Month over Month | 0.2% | -0.1% | -0.2% |
| Year over Year | 0.6% | 0.5% |
Highlights
The UK housing market showed tentative signs of stabilisation in June, with house prices increasing by 0.2 percent month-over-month following three consecutive monthly declines. Although the annual growth rate edged up to 0.6 percent, the modest pace of appreciation indicates that the market remains characterised by cautious optimism rather than strong momentum. The average property price of £299,330 reflects resilience despite persistent affordability challenges.
Furthermore, the latest report suggest that macroeconomic conditions continue to exert significant influence on housing demand. Ongoing global economic uncertainty, together with elevated inflation expectations and interest rate sensitivity, has constrained buyer activity. Nevertheless, the gradual easing of mortgage rates represents a positive development, improving financing conditions and potentially stimulating market transactions in the coming months. The decline in mortgage approvals during May appears to be a lagged response to earlier increases in borrowing costs rather than evidence of weakening structural demand.
Encouragingly, first-time buyers demonstrated renewed resilience, with annual house price growth accelerating to 0.8 percent, indicating sustained underlying demand despite affordability pressures. Looking ahead, the housing market is expected to experience gradual rather than rapid expansion. Continued moderation in inflation, further reductions in borrowing costs, and strengthening consumer confidence will be critical determinants of future price growth and overall market recovery.
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.