UK NEWS

HOUSE PRICES UP 5.2%

The value of the average home in the UK now stands at £197, 039

Wednesday January 9,2008

By Sarah O’Grady, Property Correspondent

Comment Speech Bubble Have your say(8)

BRITAIN’S struggling housing market received a huge boost yesterday as the country’s biggest mortgage lender announced a rise in property prices.

The Halifax bank says its figures for December show that the market grew 5.2 per cent year-on-year – dispelling scaremongering predictions that prices will fall this year.

The bank also reported a 1.3 per cent hike in house values during December itself, all but wiping out falls in the previous three months.

It is the biggest monthly rise since February last year and gives further ammunition to experts who predict that property prices will continue to rise steadily this year.

Overall, the value of the average home in the UK now stands at £197,039 – around £11,759 more than at the start of last year.

The Halifax expects price rises to slow in 2008 but says this should be seen in the context of a 182 per cent surge in property prices over the past 10 years.

The optimistic outlook means tomorrow’s Bank of England decision on interest rates is now poised on a knife edge.

The latest figures may prompt the Bank to keep rates on hold before considering further cuts later in the year.

But many City economists still expect the Bank to cut interest rates by 0.25 per cent for the second month in succession to 5.25 per cent to ease the pressure on home owners.

Howard Archer, chief UK and European economist at analysts Global Insight, said: “Halifax hints that house prices may prove relatively resilient over the coming months, thereby easing concerns that a sharp correction in house prices is looming.

“But we still believe there is a strong case for the Bank to cut rates to 5.25 per cent as soon as Thursday and by February at the latest.”

Tony Ahearne, of financial ratings online service Moneyspider.com, said: “These figures showing a £2,500 rise in the cost of an average home last month is bound to put a dampener on the prospects of a rate cut.

“But millions of home owners will be desperately disappointed if the Bank of England does not cut the base rate.”

A home owner with a £200,000 interest only mortgage would see their monthly payments drop by £41.67 if the predicted rate cut is announced.

Martin Ellis, Halifax chief economist, said: “Higher mortgage repayments in response to the series of five interest rate increases between August 2006 and July 2007 and falling earnings have put pressure on household incomes, resulting in a slowdown in both house price growth and activity in recent months.

“But sound economic fundamentals and lower interest rates will support house prices during 2008.”

Despite the December rise, however, there is little doubt the property market is slowing down.

The Council of Mortgage Lenders yesterday said the number of new mortgages taken out had fallen to a seven-month low in November.

Gross lending totalled £30billion in November, down 10.4 per cent from £33.5billion in October.

HOUSE PRICES UP 5.2% - "WRONG ANSWER"

16.01.08, 5:03pm

Some journalists just cannot help themselves, this headline is totally misleading, although the headline is not a lie (as such)? house prices did increase by 5.2% during the whole of 2007, however for the last six months of the year property prices have declined, in a far greater way than is reflected in the figures to which this report refers? the situation in the property market is far worse than anyone involved would like to admit. estate agents are in a very difficult position now, they are part of the problem and they know it? house prices have far out stretched any inflationary or normal/sensible trading practice, in other words people have been profiteering of the back of cheap credit and in most cases just because they could! and now that the tide as turned they refuse to acknowledge that it is there job to lower prices, which is against there nature and culture? which in turn has fuelled the current stalemate and stagnation of the property market. Peoples jobs are at risk now and also peoples livelyhoods ie. people that have been led to buying over inflated property on cheap credit are now being put at rist by those that did the leading in the first place?
If you ask an estate agent he will tell you that it is all down to hips and interest rates, which it is not totally, a lot of it is down to themselves, and these other reasons, are just a way of taken any onus away from there own involvement in the current situation????

• Posted by: GJC • Report Comment

JUST THE SAME OLD MALIGN INFLUENCE BEHIND IT ALL

10.01.08, 9:39am

Whatever happens to house prices you can rest assured there's the cancerous growth of this government behind it all. They've tinkered and interfered with everything that once worked and we took for granted until now absolutely nothing works anymore. They invite the worlds waifes and strays to settle here as if the indigenous population owes them a living. Now the streets are awash with flotsam and jetsom from
everywhere all with their begging bowls waiting to be housed and fed, all at the taxpayer's expense. Treasure Island? Yes for everyone but the indigenous population who pay for it all.
'Shipwrecked? Nay mate, marooned...' like Ben Gunn. They couldn't have done a better job if they had formed a pact with hell itself.

• Posted by: stevgillamos • Report Comment

HOUSE PRICES UP 5.2%

09.01.08, 10:07pm

nothing has changed, when we bought our first house 25 years ago, the pain and agony of paying the mortgage would be just the same as todays first time buyers, remember we went through the thatcher 15% mortgage rate. the only positive is that after a while you begin to cope. so a message to the media who keep reporting doom and gloom. stop it and start reporting the good things in getting started on the property market, ie its best to be a homeowner than a tenant and so it is worth that bit more to pay amortgage

• Posted by: ledzep • Report Comment

PRICES & DEMAND GO HAND IN HAND

09.01.08, 7:33pm

The house prices will continue to go up as demand outstrips supply,while 600,000 - 1,000,000 immigrants (legal or illegal) come every year into the country and need to be housed plus the indiginous population in this country wanting houses there ill never be enough.One of the main causes that are moving the lower end of the market (and this is confirmed by several of my local estate agents) is the properties at the lower end of the market are being brought up by the influx of polish workers,some of whom are living 7-10 in a house ,and the fact that all immigrantswaiting for thier british citizenship do not have to pay income tax and therefore can afford to buy.With regards to council houses there is also a shortage as the illegal immigrants comming into the country are given priority when homes are given out (regardless of what your local council or the government say),and with foriegn nationals who come over here as students and outstay thier visas will not now be sent back (thanks to this government ,this week) the problem will only get worse.

• Posted by: jonG • Report Comment

HOUSE PRICES UP 5.2%

09.01.08, 2:17pm

Of course house prices will go up. There is a shortage of houses, therefore up go prices, the old story of supply and demand. Still if you want to hang back and not upgrade now that's your bad luck and I hope you can afford it. Me I'm buying yet again to beat the price rises!

• Posted by: informed • Report Comment

END THIS NONSENSE

09.01.08, 1:06pm

When are newspapers going to stop banging on about house price rises being a good thing?

If you are a first time buyer on a modest income, then it is bad news. If house prices are rising, then it is because there are not enough houses to meet demand.

• Posted by: Camerton • Report Comment