Low volume of sales leading to volatile monthly fluctuations in housing market
House prices have fallen by 1.2% month-on-month in August to according to the latest Halifax House Price Index - the first drop since April.
The Halifax HPI is the second industry indicator to report a monthly fall in house prices, coming a week after the Nationwide survey showed a fall of 0.6%.
According to the Halifax, the three-month trend shows a price rise of 1.0%. On an annual basis, prices in August were 2.6% lower as measured by the average for the three months to August against the same period in 2010.
Commenting on the figures housing economist Martin Ellis said: 鈥淎s we have pointed out before, the current low volume of sales tends to make house prices volatile from month to month. The 1.2% fall in August follows three months when prices have risen.
鈥淎s a result, the more reliable quarterly change, which smoothes out some of the monthly volatility, shows a rise in prices of 1.0%.
鈥淟ow interest rates are likely to continue to support the market whilst increased uncertainty about the economic outlook and pressures on householders鈥� finances constrain demand. Overall, we expect broad stability in both prices and activity over the coming months.鈥�
The Halifax also reported that the average mortgage rate for a new borrower fell in July to 3.68% from 3.84% in June, improving affordability for those that can raise a sufficient deposit to buy a home.
No comments yet