HALP Halifax 9.375bd

RNS Number:1442J
HBOS PLC
05 December 2007



                              Halifax House Price Index

           National Index                                  November 2007


                       All Houses, All Buyers Index (1983=100)

Index (seasonally adjusted) 630.8     Monthly Change -1.1%    Annual Change 6.3%

            Standardised Average Price (seasonally adjusted)  #194,895


Key Points
     
*    House prices fell by 1.1% in November.  In annual terms, house prices are 
     6.3% higher.

*    A mixed pattern of monthly price rises and falls is a typical feature of a 
     more subdued housing market.  For example, there were six monthly falls and 
     six monthly increases between July 2004 and June 2005 as the market slowed 
     in response to a series of interest rate rises during 2004.

*    The housing market has slowed in recent months as the increase in interest 
     rates between July 2006 and July 2007 has taken effect.  Higher mortgage 
     repayments and falling real earnings have put pressure on households' 
     income, resulting in a slowdown in both house price growth and activity.

*    A robust UK economy and the accompanying sound health of the labour market 
     provide strong underpinnings for the housing market. Gross domestic product 
     (GDP) increased by 0.7% between 2007 Q2 and 2007 Q3, the eighth consecutive
     quarterly increase above the long-term average rate of 0.6%.

*    The economy has now grown for 61 successive quarters.  This represents the 
     UK's longest running period of unbroken GDP growth on record; a performance 
     that no other developed nation can match.  Again, this provides the housing
     market with a very solid foundation.

*    The number of people in employment increased by 69,000 between 2007 Q2 and 
     2007 Q3.  Employment in 2007 Q3 was 178,000 higher than in 2006 Q3, at 
     29.22 million. Employment levels are at a record high.

*    Market activity is lower.  Mortgage approvals to fund house purchase fell 
     by 12% in November to 88,000 (seasonally adjusted).  Approvals in November 
     were 32% lower than a year earlier. New buyer interest in purchasing a
     house fell for the eleventh successive month in November.


Commenting, Martin Ellis, chief economist, said:

"House prices fell by 1.1 per cent in November.  In annual terms, house prices
are 6.3% higher.

The housing market has slowed in recent months as the increase in interest rates
between July 2006 and July 2007 has taken effect.  Higher mortgage repayments
and falling real earnings have put pressure on households' income, resulting in
a slowdown in both house price growth and activity.

The UK economy is in sound shape. Strong market fundamentals, a structural
housing supply shortage and pent-up demand from a large number of potential
first-time buyers will support house prices, preventing a sustained and
significant fall."

A mixed pattern of monthly price rises and falls is a typical feature of a more
subdued housing market.

For example, there were six monthly falls and six monthly increases between July
2004 and June 2005 as the market slowed in response to a series of interest rate
rises during 2004.  It is not unusual to see successive monthly falls in these
circumstances.

A robust UK economy and the accompanying sound health of the labour market
provide strong underpinnings for the housing market.

Gross domestic product (GDP) increased by 0.7% between 2007 Q2 and 2007 Q3.
This was the eighth consecutive quarterly increase above the long-term average
rate of 0.6%, underlining the strength of the UK economy. The economy has now
grown for 61 successive quarters.  This represents the UK's longest running
period of unbroken GDP growth on record; a performance that no other developed
nation can match. (Source: ONS)

The number of people in employment increased by 69,000 between 2007 Q2 and 2007
Q3.  Employment in 2007 Q3 was 178,000 higher than in 2006 Q3, at 29.22 million.
(Source: ONS)


Supply shortages will also support house prices.

The ongoing inability of the rate of housebuilding to match the pace of new
household formation will also support house prices.


Annual rate of house price growth at 6.3%.

As expected, the annual rate of house price inflation has fallen in recent
months as the strong monthly house price gains during the autumn of 2006 have
dropped out of the year-on-year comparisons. The annual rate eased to 6.3% in
November from 8.9% in October.


Market activity is lower

Mortgage approvals to fund house purchase fell by 12% in November to 88,000
(seasonally adjusted).  Approvals in November were 32% lower than a year
earlier. (Source: Bank of England)

Completed property sales are down 15% on an annual basis and new buyer interest
in purchasing a house fell for the eleventh successive month in November.
(Source: RICS)




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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