Halifax have claimed that the UK’s housing market experienced a surprise rise in house prices during December. This rise would be the fastest growth experienced in nearly two years. Despite these positive noises, Halifax also warns of caution as Brexit draws closer.
Halifax remains one of the UK’s biggest and most active mortgage lenders. Their analysis suggests the average home increased in value by 2.2% in December – compared to the previous month. This surge in growth was unexpected amongst economists who continue to make cautious predictions as the UK’s divorce date with the EU comes ever so closer.
However, the housing market has stagnated somewhat throughout 2018 and was actually the weakest annum for property prices since 2012. Property prices only rose a meagre 1.3% during the year which is being blamed on the uncertainty of Brexit and reduced affordability across the board.
The future doesn’t look any brighter as experts are warning of continual growth restraints due to a prolonged period of insignificant wage growth combined with the possibility of a deal-less Brexit.
Capital Economics’ property expert, Hansen Lu, states that many buyers were priced out of property purchases due to inconceivable prices in conjunction with income.
Halifax’s latest claims come even more of a surprise when considering a recent report from Nationwide. Their report opposes Halifax’s figures by suggesting price growth in December was only 0.5% – one of the worst months of price growth in almost five years.
Other analysts have reminded us that the key barometers of price inflation are volatile. They suggest lower numbers of purchases due to Brexit will have influenced the countering figures.
Former chairmen of RICS, Jeremy Leaf, agrees with the aforementioned comments by stating the “why” behind Halifax’s figures is more likely a reflection of a reduction in transactions amidst Brexit.
The rise is also not applicable to some areas of the UK. Growth differs significantly across different areas. Some parts of the UK have experienced increased prices while others, mainly London, have remained flat or fallen.
Russel Galley from Halifax has put his neck on the line with his forecast for the year ahead. He predicts a more stable period of growth during the upcoming year, ranging between two and four percent. However, these figures will hinge on the outcome of Brexit.
