| UK
House Prices Situation: Small falls reported by largest
mortgage lenders
UK
House Prices Forecast: Falls expected to continue, but
how far isn't clear
House
Price Index Comparison: Nationwide vs. Halifax
The
UK's two largest mortgage lenders, Halifax and Nationwide,
have both published their house price
reports for February in the last week.
Between
them, these two mortgage lenders account for a pretty
sizeable chunk of the UK mortgage market - so they should
have a reasonably good idea of what's going on in the
mainstream housing market (i.e. buyers
with good credit, buying mid-priced, mortgaged houses).
Based
on that logic, both Halifax and Nationwide should be seeing
roughly the same house price trends -
so are they? Here's what the two lenders had to say about
house prices in February 2008 (equivalent figures for
January in brackets):
Nationwide
Monthly change: -0.5% (-0.3%)
Halifax Monthly change: -0.3% (0.0%)
Nationwide
Annual change: 2.7% (4.2%)
Halifax Annual change: 4.2% (4.5%)
So
although there are some differences, it's fair to say
that both Halifax and Nationwide are seeing similar trends
- a slow but steady reduction in average house
prices.
The
next obvious question is to ask what the future holds.
Here's what Halifax and Nationwide have to say about the
outlook for house prices in the rest of 2008:
Halifax
said: "We predict that house prices
will be flat during 2008 as a whole."
Nationwide
were less certain. Fionnuala Earley, Nationwide's Chief
Economist, commented that "The trend in prices is
clearly weakening, but the size of the drop in the annual
rate between January and February perhaps overstates the
rate of cooling…"
Nationwide's
report also concluded by saying that "Overall, it
seems clear that we will not see recent rates of growth,
in either the UK economy or housing market,
repeated for some time."
Given
that inflation means that Halifax's "flat" prices
are actually falling in real terms, both Nationwide and
Halifax appear to share a similar view of the housing
market in 2008, suggesting that we are in for a rather
subdued year.
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