Building societies spar over house prices

THE DISPUTE over the true direction of house prices intensified yesterday when Woolwich, the country's third-largest building society, claimed that a rival house prices survey by Halifax Building Society understated growth in the south-east of England.

Woolwich's deputy chairman, Peter Robinson, said growth in the South-east was about 2.5 per cent, while the latest Halifax survey for July showed house prices across the country down 0.7 per cent.

Halifax also predicted zero growth for the year, he added, but in Woolwich branches growth was continuing.

Mr Robinson said that Halifax's branch chain, with its north of England bias, did not reflect the strengthening market in the south-east of the country. He pointed out that 70 per cent of Woolwich's 500 branches and many of its 300 estate agents operated south of Oxford.

Cheltenham & Gloucester Building Society, which reported a big increase in half-year profits yesterday, sided with Halifax. C&G's finance director, David Barnes, said house prices had been 'very subdued in the first half, and will be nothing to write home about in the second half'.

Barclays Bank launched its own index measuring mortgage market activity. That showed mortgage lending rose by 3.3 per cent in August and is 4.7 per cent higher than a year ago.

The bank is measuring activity in the mortgage market by monitoring cash flows through solicitors' accounts. Barclays has 30 per cent of the market in solicitors' accounts.

The increase in lending in August follows an upward trend. The figures for the first seven months of the year are 6 per cent ahead of the same period last year. Garry Skelton, Barclays' head of mortgages, predicted that mortgage lending for the full year will be 7 per cent higher than last year.

Barclays' national average figures hide wide regional variations in housing market activity. The south of England fared worst, with activity down 8.6 per cent on a year ago and 9.6 per cent down on the previous month.

Central London saw a rise of 1.5 per cent on the month and 3.5 per cent year on year. The most buoyant region was East Anglia where activity rose by 1.5 per cent in August and is 12.4 per cent higher than a year ago.