Halifax have released their latest House Price Index for January 2020, finding that annual house price growth has risen to 4.1%.
The Halifax House Price Index is a monthly house price series with data covering the whole country going back to January 1983. In the latest iteration, the report found that house prices in January were 4.1% higher than in the same month a year earlier. House prices also rose by 0.4% over the past month, and in the latest quarter house prices were 2.3% higher than in the preceding three months. In addition to this, the index took the HMRC monthly property transactions data and found that there was both a rise in UK home sales in December and mortgage approvals from November.
Russell Galley, managing director of Halifax, had this to say regarding the findings: “A number of important market indicators continue to show signs of improvement. We have seen a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy. However, it’s too early to say if a corner has been turned. The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year but was delayed by economic uncertainty. So, while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy.
“Looking ahead, we still expect a moderate rate of house price growth over the course of the year. Demand is likely to continue to exceed the supply of properties for sale across the UK, with the subdued pace of new building also adding to upward price pressure. The environment for mortgage affordability should stay largely favourable. However, with the growth in rental costs accelerating, many first-time buyers will continue to face a significant challenge in raising necessary deposits.”
The data only adds to growing consensus that the UK property market has recovered since the General Election. According to Rightmove, demand across the UK from prospective buyers increased by 28% in the four days after the election compared to the same four days in 2018. It’s not surprising to see a boom in the property market even this long after the election thanks to the so called ‘Boris Bounce’, and one would expect that house prices will continue to grow at a significant rate throughout the year. The market sentiment is better than ever after the ongoing uncertainty over the last few years seems to be coming to an end, which is great news for investors, landlord and sellers alike.
With the UK having formally left the European Union at the end of last month, the property market can expect another boost in February and many analyst reports forecast substantial growth for the remainder of the year as the political ambiguity draws to a close.
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