Mortgages  

House price optimism falls to 18-month low: Halifax

House price optimism falls to 18-month low: Halifax

House price optimism fell to its lowest level for 18 months in January, as lending got off to sluggish start, according to Halifax.

While the Halifax house price index found prices increased 2 per cent to £193,130 in January, 60 per cent of consumers expected the average property price to be higher in one year’s time, with house price optimism falling to the lowest since June 2013, when 52 per cent expected a rise in property prices.

Yesterday, HM Revenue and Customs’ monthly property data showed that the number of residential property transactions fell to 78,740 in January, down from 105,400 in December.

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In June 2013 inflation was at 2.9 per cent, compared to 0.3 per cent currently, while lending levels were at £15bn, compared to 17bn now.

Despite the fact that GDP grew at 2.6 per cent last year and all nine members of the Monetary Policy Committee voted to hold interest rates at 0.5 per cent, the dip in confidence levels over house prices mirrors that over the economy in general.

Craig McKinlay, mortgages director at Halifax, said that despite the dip in house price confidence the fundamentals remain in place and a return to the seasonal trend for house price activity is on its way.

“Traditionally, a slow start builds to the summer before another lull and then a further period of increase followed by a gradual easing at the end of the year.”

Of more concern are the figures from the Department for Communities and Local Government showing a slowdown in the number of new homes being built, according to Mr McKinlay.

“It’s widely acknowledged that the UK needs an increase in the amount of new housing being built. If we are to address demand the increase in new homes coming onto the market needs to be sustainable.”

peter.walker@ft.com