Market for housing is in 'limbo', says bank's expert

The housing market is lacking direction, Halifax has warned. Its latest house price index, published yesterday, showed that property prices slumped a further 0.5 per cent last month after falling 1.1 per cent in August.

Over the quarter, prices showed an increase of 0.1 per cent, the first quarterly increase since the first three months of 2010. But that is not a sign that the market is picking up, said Martin Ellis, housing economist at the bank.

"We've experienced a mixed monthly picture so far this year with four rises, four falls and one no-change since January," he pointed out. "This mixed pattern is consistent with a market where prices are lacking genuine direction."

Alex King, a director of the mortgage broker SPF Private Clients, said: "Once again the property market continues to bounce around with no discernible direction. Low interest rates, cheap mortgage finance and, in many areas, a shortage of homes are propping up prices while weak consumer confidence and reduced disposable incomes are causing people to sit on their hands. The market is essentially in limbo."

The average price of a home has fallen 2.3 per cent in the past year to £161,132, according to Halifax. But mortgage affordability appears to be improving. Typical mortgage payments for a new borrower have fallen from a peak of 48 per cent of average disposable earnings in mid 2007 to 26 per cent in the last three months.

That leaves it at its lowest level since 1997 and significantly lower than the average of 37 per cent recorded over the past 25 years.

However, greater uncertainty about the economy and individuals' financial circumstances, together with pressure on home-owners' finances from weak earnings growth, higher inflation and increases in taxes, will continue to hold back housing demand, Halifax said.

Mr Ellis said that low interest rates and a rise in employment over the past year have supported the market, bringing about stability for prices and activity.

"We expect little change over the remainder of this year," he added.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
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

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test