The latest house price index from the Halifax puts house prices as having fallen 1.4% in April. There has also been a quarterly move down of 1.2% and a drop over the year of 3.7%.


The Halifax HPI now has the price of an average house as £160,395.

Last week the Nationwide index had house prices also falling but at the much lower rate of 0.2% with an average price of £165,609.

The Land Registry, which only has figures available to March, has the monthly decline in prices at 1.1% with an average price of £160,996 with an annual fall of 2.3%.

But when compared overall one can see the big picture is one of little change all round. This graph shows that house prices are as ever moving in their usual glacial manner.

HPI-apr2011

April 2011 HPI-click on image for larger view

Everyone is agreed that even in the country's current financial situation there seems to be no real prospect of house prices moving up. But there also seems to be little that would force them down substantially either.

What has moved up though is the factor by which potential sellers value their houses when putting them on the market when compared with the average of the Halifax and Nationwide indices. The following graph shows the 'optimism index' over the years as sellers dream of getting 'that price' compared to the reality (with a factor of one being asking for the average price). Or is it a 'desperation index' brought about by negative equity and surrounding debt?

The Optimism Index

The Optimism Index - click image for larger view

So the trend is for sellers to keep asking for more. Wonder when reality will hit both sellers and estate agents alike?

Finally, just to put these indices in context, you have to really expand the view of the graph (as in the one below) to discern any real difference between them. And you have to look at the overall trend over the months and years to get a real sense of what is going on.

HPI expanded - click on image for larger view

HPI expanded - click on image for larger view

The overall view from this? Probably a slow decline in prices over the coming years with a few blips here and there (London as an example) until inflation has helped reduce the real price of houses further and the more traditional relationship between house prices, wages and mortgages has been restored.

But there may well eventually be an overshoot, at which point the whole bubble cycle re-ignites.

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