Societies cast gloom on prices

NIC CICUTTI

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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own