How did house prices perform last year?
With Brexit uncertainty the buzzword for 2019, it turned out to be a fairly decent year for house price growth, despite widespread homeowner nervousness.
House prices rose by 4% on average in the UK last year.
This growth is at the top of Halifax’s predicted range of 2% to 4% growth for the year.
The house price growth was driven by a monthly gain of 1.7% in December, which was the most significant monthly increase of 2019, increasing the year-on-year growth rate.
However, it reflects the fact that December 2018 was a very weak month.
The Halifax House Price Index shows that during the latest quarter (October to December 2019) house prices were 1% higher than in the preceding three months (July to September 2019) settling at an average house price of £238,963.
The Halifax House Price Index is the UK’s longest-running monthly house price series with data covering the whole country going back to January 1983.
From this data, a “standardised” house price is calculated, and property price movements on a like-for-like basis (including seasonal adjustments) are analysed over time.
The annual change figure is calculated by comparing the current month non-seasonally adjusted value with the same month a year earlier.
According to the HMRC monthly property transactions data, there was a rise in UK home sales in November 2019.
The UK seasonally adjusted residential transactions in November were 102,050, up by 3.2% from October 2019 and the highest level since August 2017.
Year-on-year sales in November 2019 were approximately 1.9% higher than November 2018, but 0.2% lower on a non-seasonally adjusted basis.
The good news in the data is that mortgage approvals have risen slightly from October 2019.
Figures provided by the Bank of England show that the number of mortgages approved to finance house purchases was 64,994 in November, up by 0.5% on the previous month.
This figure is especially good as mortgage approvals fell by 1.8% one month earlier in October.
Year-on-year growth for mortgage approvals is 1.4%.
The latest set of results from November 2019 for the RICS (Royal Institution of Chartered Surveyors) Residential Market Survey has shown new buyer enquiries falling for the third consecutive report, with a net balance of -9% of respondents citing a decline.
The pace of decline has, however, eased compared to the last two months (-15% and -16%).
Meanwhile, newly agreed sales net balance continued to signal a modest fall in transactions.
Again, the pace of decline (in net balance terms) eased in comparison to the last two months with the latest reading moving to -8% from -18% and -27% previously.
Sales expectations net balance has edged up to +11% (from 5% in October).
Russell Galley, managing director Halifax Bank, said:
“Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.
“Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.”