Halifax House Price Index shows growth in May

Halifax House Price Index shows growth in May

The Halifax House Price Index has been released this week, and shows that UK house price growth on an underlying basis increased for a second month in a row in May.  House prices increase by 0.5% in May, which follows a volatile few months, which a 2.2% increase in March, and a 2.3% decrease in April.
House prices in the three months to May were 0.8% higher than December 2011 — February 2012.  This is the second successive increase in this measure of the underlying trend in prices.  It follows six consecutive falls between October 2011 and March 2012, and is the biggest three monthly increase since August 2011.  This shows an improving trend in the annual rate.  Prices in the three months to May were 0.1% lower than last year, the smallest yearly decline in house prices for 17 months.
The average UK house price in May 2012 was £160.941, 0.7% higher than in December 2011.
Home sales fell by 18% between March and April, as the expiry of the stamp duty holiday for first time buyers pushed some house purchases forward to beat the deadline.  
Martin Ellis, housing economist at Halifax commented:
“House prices in the three months to May were 0.8% higher than in the previous quarter, marking the second successive increase in this measure of the underlying trend.  The more volatile monthly figures showed a 0.5% rise in May following April’s 2.3% decline.
“Whilst there has been a modest improvement in the trend for house prices recently, the current average UK price is very similar to the levels both a year ago and at the beginning of this year.  We expect this situation to continue with prices likely to still be around today’s levels at the end of 2012 as the ongoing tough economic environment constrains housing demand.
"Recent monthly house sales figures have clearly been affected by the ending of the stamp duty holiday for first-time buyers in late March. Overall, the trend for sales – like that for prices — appears to be one of broad stability."
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