House prices up 1.2% in October, says Halifax

Published: 07 November 2011
Source: www.bbc.co.uk

UK house prices rose by 1.2% in October compared with September, but have fallen over the last year, according to the Halifax. The lender, part of Lloyds Banking Group, said that values had fallen by 1.8% compared with a year ago.

It said that the housing market had remained "highly resilient" despite weakness and a deteriorating outlook for the UK economy.

The average home in the UK was valued at £163,311, the Halifax said.

Its house price survey is based on its own mortgage data.

'Resilient'

The Halifax said that there was a 0.3% fall in prices in the three months to the end of October compared with the previous quarter. This was the first time this measure has recorded a fall since June.

Martin Ellis, Halifax's housing economist, said that this was an indication of the general stability of prices, despite the month-on-month figures having shown some volatility during the year.

"The housing market has proved highly resilient in recent months, despite the weak economic recovery and the deterioration in the outlook for both the UK and global economies," he said.

"The prospect of exceptionally low official interest rates over the foreseeable future is likely to continue to support the market in the face of a very difficult economic climate.

"Both prices and activity levels are expected to remain close to current levels over the coming few months."

The survey's findings are similar to the picture painted by the Nationwide Building Society. A week ago, it said that UK house prices were "treading water".

The Nationwide said the annual change in October was a 0.8% rise.

However, the year-on-year comparison is calculated slightly differently by the two lenders. The Halifax compares the previous three months with the same three months a year earlier to give a smoother comparison, rather than a direct comparison of the equivalent months.

The most recent figures from the Land Registry showed that there have been sharp differences in price changes in different parts of the country.

In London, prices rose by 0.3% in September compared with August, and were up 2.7% compared with a year ago. Yet the North East of England witnessed a 3.9% drop in month-on-month prices, and an 8.2% fall in annual values.