Or at least they won’t according to the a report in the Express.
A small drop of 0.1% between the months of October to November taken from the latest Halifax report, is being interpreted by the Express, as a stabilisation of the housing market.
This they say is backed up by figures from LSL Acadametrics that indicate that house prices actually rose in November by 0.2%. This is the seventh month on succession that they have recorded small gains. Year on year house price growth they put at 5.9% but the number of transactions dropped by 4.6% and are 5.3% less than last year.
So it would seem that overall fewer houses are changing hands but prices still stubbornly refuse to drop.
But when looking further into the Halifax report you see that house prices have dropped 2.1% over the previous three months. And, as the report itself says, – “House price data on a quarterly basis provides a clearer indication of the overall market trends, smoothing out the volatility caused by the reduced number of monthly transactions in all house prices indices’ monthly figures”. So looking at a monthly figure and calling it stabilisation is questionable.
Although the report puts house prices in November at 6.5% higher than in the April 2009 trough, it points out that the leading indicator of mortgage approval numbers is continuing to slide.
Halifax housing economist Martin Ellis puts all this in a positive light and says in the report “Interest rates are likely to remain very low for an extended period, which will support the improved mortgage affordability position for homeowners. As a result, we do not expect to see a significant fall in house prices." He also says that recent supply over demand has exerted a downward pressure on house prices, but there are “ … some tentative signs that homeowners are becoming more reluctant to put their properties on the market … “ so the supply / demand balance will re-balance so maintain price levels.
So I take it then that if no-one puts their houses on the market prices will be totally stabilised. But that would not mean that the market or the economy is healthy would it? It’s not the prices of houses that keeps estate agents, conveyancers, DIY shops, removal firms etc in business. It is the constant and consistent stream of people moving around the country that keeps food on their tables.
It’s not house prices that need stabilising. It is the number of completions taking place that needs stabilising at a level that optimises workforce mobility. And if that requires a sharp house price correction then so be it. It would be better for the economy in the long run.