Halifax: House prices in biggest monthly rise since 2002

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by Kay Murchie

The latest survey from the Halifax has revealed that UK house prices have experienced their biggest rise since October 2002.

According to the lender, which is now part of the Lloyds Banking Group, house prices were up 2.6% in May compared with the previous month and takes the average UK home to £158,565.

However, the Halifax has cautioned that activity is still at low levels and warned against placing too much emphasis on monthly figures.

House prices fell by 3.1% in the three months to May compared with the previous three months, said the lender, while the annual rate of decline has now eased from 17.7% in April to 16.3% currently.

Today’s news from the Halifax comes in the same week that the Land Registry reported that house prices fell by 0.3% in April in England and Wales.

Furthermore, Hometrack reported this week that house prices remained unchanged in May, while just last week, the Nationwide reported a rise in prices of 1.2% in May.

However, despite the differences, all housing commentators highlight that market conditions are expected to remain difficult over the next few months.

Nitesh Patel, the Halifax’s housing economist, points out that house prices fell 11% during 1991 and 1992, but during this period, there were still five monthly price rises.

This was echoed last week by Nationwide’s Chief Economist Martin Gahbauer, who said: “During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods.

In related news today, the Bank of England has announced it has kept interest rates on hold at the historic level of 0.5%.