| UK Halifax house price index shows strong monthly increase, but housing market remains subdued |
| 07.11.11 10:42 | |
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The Halifax house price index reported a strong increase in October. The headline measure increased by 1.2% m/m compared with -0.3% previously (consensus: 0.1%). Although the survey showed a significant monthly increase in prices, we would point out that the data are very volatile on a month on month basis and as such we would not read too much into today's increase. A less volatile measure, the 3m/3m change showed the Halifax house price index falling by 0.3%. The Nationwide house price index also reported increasing house prices for October, albeit a more modest 0.4% m/m rise. Due to the volatility in the data the MPC looks at the 3m/3m average of the Nationwide and Halifax surveys. This measure reported a fall by 0.2% 3m/3m (see chart), far from the strong monthly increase reported by the Halifax survey. The house price data published for October so far indicate that while prices were reported to have increased on the month, the less volatile 3m/3m moving averages measures indicate a more subdued market with house prices falling further. The uncertain economic outlook and a fragile labour market are likely to weigh on housing demand over the coming months, but we expect this effect to be balanced by low interest rates, leading to the housing market moving sideways. source: BarCap |
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