Societies cast gloom on prices
Tuesday 03 October 1995
Britain's top two building societies, Halifax and Nationwide, warned yesterday against hopes of a rapid recovery in the housing market, despite recording the largest house price rise in more than six months.
Both societies said prices were still lower than a year ago, while sales were still at a low ebb. Their figures came on the first day of new government restrictions on state benefits for homeowners who lose their jobs.
Halifax said house prices rose by 0.3 per cent in September, but are down 2 per cent on a year ago. Nationwide's index showed a 0.6 per cent monthly rise but a 1.3 per cent yearly fall.
The only time Nationwide has recorded an increase greater than last month was in March, when its figures showed a one-off 1.2 per cent rise.
In Halifax's case, its September rise is the highest since last year. Philip Williamson, divisional director at Nationwide, pointed out that recent figures from the Inland Revenue showed that transactions were at their lowest level since early 1993.
"Confidence remains poor after the experience of recent years and this could continue to be a potential restraint on [any] recovery," he said.
His views were backed by the Council of Mortgage Lenders, the industry's trade body. "It is too early to say whether this is the first sign of a revival. One would have to look at many more months' house prices before making a firm judgement," the council said.
"Higher transactions would be a sign of greater confidence by homeowners and new borrowers. That is dependent on what initiatives are taken by the Government."
Despite his caution, Mr Williamson said he was still hopeful of a modest house price rise next year. "There are grounds for believing the market will show some improvement," he said.
"Weak growth in personal incomes, a significant drag on the market in 1995, could be alleviated by tax cuts in November's Budget. The recent improvement in the outlook for interest rates is also an important positive factor."
Mr Williamson also argued that a turnaround in house prices would depend on government measures to stimulate activity.
"Next month's Budget offers an opportunity [for it] to provide specific help for the homebuyer, thus reaffirming its support for owner-occupation," he said.
Over the past six months, lenders have waged a bitter campaign against government cuts to mortgage interest payments made when many borrowers become unemployed.
The changes, which take place today, mean that new borrowers will not have the interest paid on their mortgages for the first six months. Existing borrowers will be denied payments for two months, switching to half the interest for another four months.
Some lenders argued the cuts would depress house prices further and push up repossession rates.
- 1 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 2 Tower Bridge glass walkway 'smashed' by night-time visitor dropping bottle of beer
- 3 Anti-gay hate preacher accidentally tweets 4,000 followers cartoon clip of him 'confessing' to be a 'homosexual sodomite'
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 5 Grayson Perry: London needs affordable housing because 'rich people don't create culture'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
France 'blocks' Russian sailors from boarding a warship
Rochester aftermath: Sacking of Emily Thornberry will make work of Labour MPs '10 times harder'
Revealed: How the world gets rich – from privatising British public services
iJobs Money & Business
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...