Forecast of recovery in housing market boosted by Halifax data

NIC CICUTTI

Housing analysts' tentative forecasts of recovery for the housing market received fresh backing yesterday from a survey by Halifax Building Society, showing house prices rose 0.3 per cent in December.

This latest monthly increase, the fifth in a row, still means the cost of a home is 1.4 per cent lower than in December last year.

But the Halifax yesterday claimed the figures confirmed its view that prices have now stabilised.

Despite the house price rise, separate statistics from the British Bankers' Association showing that the amount committed by large banks to would- be borrowers dropped by 8 per cent, to pounds 1.55bn in November.

The number of lending approvals by banks also suffered a sharp 10 per cent drop in November, down to 30,000 from 33,000 the previous month.

However, the seasonally adjusted figures for net lending by large banks - new home purchases rather than re-mortgages - still grew from pounds 616m in October to pounds 677 the following month.

The Council for Mortgage Lenders said the fall in approvals, which cut the banks' share for home loans from 41 per cent of the market in October to 33 per cent the following month may have been caused by the mortgage price war which began in September.

Although the cost-cutting was sparked by Abbey National, now a bank, most large building societies responded to the challenge within hours rather than days, as high street banks did.

As a result, societies' aprovals figures for November were up from pounds 2.8bn the previous month to pounds 3.2bn.

"If you add up both banks and building societies' figures, the underlying picture is of a rise in lending over the past few months.

"This is further evidence that the market is slowly begining to sniff the air again," a CML spokewoman said. Gary Marsh, a senior manager at the Halifax, said:

"We are not trying to talk up the market. Indeed, while we believe the last five months' figures indicate the collapse in prices has peaked, we don't claim things will be on the up and up forever.

"Our new year prediction of 2 to 3 per cent increases in house prices for the next 12 months includes the possibility of negative monthly figures as well, although this has not happened in December."

Tim Sweeney, director general at the BBA, also sounded a cautiously optimistic note: "Net lending by the major banks strengthened a little. With the building societies reporting a sharp increase in net advances in November, the lending data add support to the view that the new year may see a modest improvement in the housing market.

"Compared to the very buoyant October figures, new approvals fell back, though part of this drop was probably seasonal in nature." Don Smith, UK economist at HSBC Greenwell, said:

"We believe the Halifax figures show the market is heading in the direction we have predicted for some months now.

"Although new approvals by banks are down, it is likely that this is a reflection of the fall in market share.

"What needs to be examined here is the seasonally-adjusted figures for net lending, which were up month-on-month."

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Britons buy more than 30 million handsets each year, keeping them for an average of 18 months
tech
Arts and Entertainment
Alloysious Massaquoi, 'G' Hastings and Kayus Bankole of Young Fathers are the surprise winners of this year's Mercury Music Prize
musicThe surprise winners of the Mercury Prize – and a very brief acceptance speech
Arts and Entertainment
TV Presenters Ant McPartlin and Dec Donnelly. Winners of the 'Entertainment Programme' award for 'Ant and Dec's Saturday Night Takeaway'
musicAnt and Dec confirmed as hosts of next year's Brit Awards
Arts and Entertainment
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
film
News
video
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Market Risk Manager - Investment Banking - Mandarin Speaker

£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Day In a Page

Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes
Independent writers remember their Saturday jobs:

Independent writers remember their Saturday jobs

"I have never regarded anything I have done in "the media" as a proper job"
Lyricist Richard Thomas shares his 11-step recipe for creating a hit West End musical

11-step recipe for creating a West End hit

Richard Thomas, the lyricist behind the Jerry Springer and Anna Nicole Smith operas, explains how Bob Dylan, 'Breaking Bad' and even Noam Chomsky inspired his songbook for the new musical 'Made in Dagenham'
Tonke Dragt's The Letter for the King has finally been translated into English ... 50 years on

Buried treasure: The Letter for the King

The coming-of-age tale about a boy and his mission to save a mythical kingdom has sold a million copies since it was written by an eccentric Dutchwoman in 1962. Yet until last year, no one had read it in English
Can instilling a sense of entrepreneurship in pupils have a positive effect on their learning?

The school that means business

Richard Garner heads to Lancashire, where developing the 'dragons' of the future is also helping one community academy to achieve its educational goals
10 best tablets

The world in your pocket: 10 best tablets

They’re thin, they’re light, you can use them for work on the move or keeping entertained
Lutz Pfannenstiel: The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents

Lutz Pfannenstiel interview

The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents
Pete Jenson: Popular Jürgen Klopp can reignite Borussia Dortmund’s season with visit to Bayern Munich

Pete Jenson's a Different League

Popular Klopp can reignite Dortmund’s season with visit to Bayern
John Cantlie video proves that Isis expects victory in Kobani

Cantlie video proves that Isis expects victory in Kobani

The use of the British hostage demonstrates once again the militants' skill and originality in conducting a propaganda war, says Patrick Cockburn
The killer instinct: The man who helps students spot potential murderers

The killer instinct

Phil Chalmers travels the US warning students how to spot possible future murderers, but can his contentious methods really stop the bloodshed?
Clothing the gap: A new exhibition celebrates women who stood apart from the fashion herd

Clothing the gap

A new exhibition celebrates women who stood apart from the fashion herd
Fall of the Berlin Wall: Goodbye to all that - the lost world beyond the Iron Curtain

The Fall of the Berlin Wall

Goodbye to all that - the lost world beyond the Iron Curtain