House Price Update to 4 November 2009

UK House Prices Situation: Positive, but only just

UK House Prices Forecast: Prices will fall in most areas in early 2010

New House Price Figures

Let’s start with some figures. Halifax and Nationwide have both published house price figures for October in the last week and both showed weaker growth than in September.

The Halifax saw an increase in the average house price of 1.2% in October, resulting in an annual rate of change of -4.6%. Nationwide saw things slightly differently, with a monthly increase of 0.4% and an annual change of 2.0%. In both cases, growth was weaker than the previous month, when Halifax and Nationwide reported average house price increases of 1.5% and 0.9% respectively.

What the Economists Said

Commenting on these figures, Nationwide’s Chief Economist Martin Gahbauer said that “A moderation in the rate of house price inflation was to be expected”, as the level of increase seen over the last few months was “unlikely to be sustainable over the long run.”

Gahbauer also said that in recent months there had been signs that house price inflation was getting ahead of consumer expectations, signalling a possible “period of moderation in house price inflation” – a fall, to you and I - in the months to come.

Halifax’s housing economist Martin Ellis found a different way to predict the same thing. He noted that the current imbalance between supply and demand (more people buying than selling) might be eased by more sellers being encouraged to put their houses on the market. In turn, this could ease pressure on prices, slowing house price inflation.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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