Scepticism as Halifax says house prices shoot up 2% in a month

House prices shot up 2% last month, the Halifax has reported, saying it was the biggest January monthly increase since 2009.

The big rise drew some comments on Twitter, with scepticism being expressed.

The Halifax says the average “standardised” house price in the UK is now £193,130 compared with £190,304 in December, and up from £175,793 in January last year.

The lender said it now expects house prices nationally to rise between 3% and 5% this year.

Separately, there is more evidence of a slowdown in central London.

WA Ellis says transactions levels are down 34% year on year, with houses much more affected than flats.

Director Richard Barber said: “We have recently compared sales transactions within SW1, SW3, SW7, SW10 and W8 (broadly speaking Knightsbridge, Chelsea, Belgravia and Kensington), and have found that transactions in January 2014 amounted to 749 but have reduced by 34% to 492 in January 2015.

“This reduction is most sharply felt within the house sector, with only nine sales occurring in January 2015, contrasting with 25 in January 2014, a reduction of 64%.”

The firm said that the spectre of mansion tax was to blame, together with general election uncertainty and the reforms to Stamp Duty Land Tax which have hit the top end of the market.

The agent did, however, say that prices have remained stable in those postcodes.

Knight Frank, in contrast, has reported softening property prices in central London. A dip of just 0.1% was recorded in January, but it was the third consecutive monthly fall. Annual house price inflation eased to 4.6%, the lowest in five years.

Ed Mead of Douglas & Gordon said that prices have dropped slightly, but he does not see it as the start of a slide.

He said: “I simply think buyers have decided enough is enough and are saying no to prices.”

However the website Home has reported far more drastic falls in asking prices in central London.

It said that in Walworth, in the borough of Southwark, asking prices fell 15% in the year to January, and in Belgravia by 10.3%.

In Islington, it says prices are down 11% since March last year, representing an average loss of £85,000 on a flat.

Home also says there is evidence that price falls could start rippling out into the south-east.

It warns: “The spectre of negative equity is looming large for recent buyers.”

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One Comment

  1. julianodell

    A sample of one lender’s mortgage approvals is not the most reliable method of measuring house price movement. The best way to really understand house price activity is to look at the widest possible data set of completed sale prices, such as that of a large national conveyancing provider, or if a more specific geographical picture is required, talk to an active, reputable local estate agent.

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