No, rub your eyes, it’s no mistake!
UK house prices rose by 1.9 per cent in January, says the Halifax house price index.
Halifax’s Martin Ellis comments:
It is always important not to place too much weight on any one month’s figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. For example, prices fell for seven successive months in 1989 but subsequently increased in three of the first ten months in 1990 even though the overall trend in prices was downwards. There are some very early signs that market activity may be stabilising, albeit at quite a low level. Nonetheless, continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability
We’re not the only ones to have been a little bit gobsmacked. Here’s IHS Global Insight’s Howard Archer on the figures:
The Halifax completely unexpectedly and somewhat incredibly reported that house prices rose by 1.9% month-on-month in January. This was the first rise in house prices since January 2008, although it did not stop the annual decline in house prices widening to 17.2% in the three months to January from 16.2% in the three months to December.
However, the year-on-year decline in house prices did narrow to 16.4% in January itself from 18.4% in December itself. The Halifax data follows on from the Nationwide reporting that house prices dropped 1.3% month-on-month in January after falling 2.5% in December. Consequently, the year-on-year fall in house prices widened to 16.6% in January from 15.9% in December on the Nationwide measure.
The very unexpected spike up in house prices in January reported by the Halifax does not fundamentally change our belief that further significant falls are highly likely in 2009. House prices can be very volatile on a month-to-month basis, and it is significant that January’s rise on the Halifax measure followed particularly sharp falls through the fourth quarter of 2008 (1.6% in December, 2.7% in November and 2.4% in October). Consequently, we would certainly want to see more widespread and sustained signs of revival before changing our view of the housing market. While there are some indications from the latest mortgage data and surveys that housing market activity may be bottoming out, this is at an exceptionally low level and there continue to be a powerful set of negative factors that seem highly likely to depress activity and prices for some time to come.
We, however, wonder if the rise may have had something to do with the weak pound and cash sales to perhaps some of our international counterparts?
That’s our happy story ration for the day done with then (as per promise to the Treasury Select committee Wednesday, not to be all doom and gloom).
In other property news, a three-bedroom house sold for £5,000 in Stockton-on-Tees near Middlesbrough.