HALP Halifax 9.375bd

RNS Number:2392N
HBOS PLC
05 February 2008



                              Halifax House Price Index

         National Index                                     January

                     All Houses, All Buyers Index (1983=100)

Index (seasonally adjusted) 638.4     Monthly Change 0.0%     Annual Change 4.5%

        Standardised Average Price (seasonally adjusted)  �197,244


Key Points


*   House prices were unchanged in January. Prices in the three months to 
    January were 1.0% lower than in the previous quarter.  This was the third 
    successive fall in house prices on this basis.


*   House prices in January were 4.5% higher than a year earlier. The average 
    price of a home in the UK has increased by �7,628 over the past year to 
    �197,244.


*   There are continuing signs of weakness in housing market activity. The 
    number of mortgage approvals to fund house purchase in the final three 
    months of 2007 was 35% lower than during the same period a year earlier.


*   We predict that house prices will be flat in 2008. Sound economic 
    fundamentals will support house prices in 2008. The economy is in good 
    health; employment levels are high.  The UK economy recorded its 62nd 
    successive quarter of GDP growth in 2007 Q4, extending the longest running 
    period of unbroken growth on record.  The number of people in employment - a 
    key driver of housing demand - has risen by 263,000 over the past year 
    earlier to a record 29.36 million.


*   The Bank of England is likely to cut interest rates again over the coming 
    months with a reduction probable this month.  We predict that the MPC will 
    cut the Bank Rate at least twice in 2008. Lower interest rates should help     
    to prevent the economy slowing too sharply, therefore supporting the housing 
    market.


Commenting, Martin Ellis, chief economist, said:


"House prices were unchanged in January. Prices in the three months to January
were 1.0% lower than in the previous quarter. Over the past year, the average
price of a home in the UK has increased by �7,628 to �197,244.


We expect sound economic fundamentals and lower interest rates to support house
prices. Nationally, we predict that house prices will be flat in 2008. The UK
economy recorded its 62nd successive quarter of growth in 2007 Quarter 4,
extending the longest running period of unbroken growth on record.  The economy
is expected to continue expanding during 2008, albeit at a slower pace than in
the past two years. Sustained growth should support a strong labour market. The
MPC is likely to cut the Bank Rate at least twice in 2008; further supporting
both the economy and housing demand."


UK economy continues to grow at a healthy pace

Gross domestic product (GDP) increased by 0.6% between 2007 Q3 and 2007 Q4,
according to recently releases figures.  (Source: ONS)  This quarterly rise was
in line with the UK economy's long-term rate of growth, but slightly below the
0.7% increase in 2007Q3. Growth for the whole of 2007 reached 3.1%, the fastest
rate for three years.  The UK economy has now grown for 62 consecutive quarters,
extending the longest running period of unbroken growth on record.  The UK is
expected to deliver its 65th successive quarter of GDP growth during 2008.  No
other developed nation can match this performance.


Employment - a key driver of housing demand - continues to rise

There was a 175,000 increase in the number of people in employment during the
three months to November compared with the previous quarter.  Employment was
263,000 higher than a year earlier at a record 29.36 million. Unemployment also
fell by 13,000 over the past quarter (Source: ONS). The continuing strength of
the labor market should continue to support the housing market.


Lower interest rates to support the economy and the housing market

The Bank of England is likely to cut interest rates again over the coming months
with a reduction probable this month.  We do, however, expect the Bank to take a
cautious approach to lowering rates because there are few signs that the economy
is slowing any more rapidly than the MPC considers necessary to keep
inflationary pressures in check over the medium term.  We predict that the MPC
will cut the Bank Rate at least twice in 2008. Lower interest rates should help
to prevent the economy slowing too sharply, therefore supporting the housing
market.


Signs of a possible stabilisation in housing market activity

The number of mortgage approvals to fund house purchase in the final three
months of 2007 was 35% lower than during the same period a year earlier,
indicating a significant fall in housing market activity  (Source: Bank of
England).  The number of new buyer enquiries has also been in decline over the
past year (Source: RICS). There has, however, been a slowing in the rate of
decline of new buyer enquiries during the past three months, suggesting that the
downturn in activity may be beginning to stabilise.


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

MSCKGGGZDDFGRZM

Halifax 9.375bd (LSE:HALP)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024

Halifax 9.375bd (LSE:HALP)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024