House prices ended up over whole of 2009

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The Independent Online

House prices ended 2009 1.1 per cent higher than they started it after the cost of property increased for the sixth month in a row during December, figures showed today.

Halifax reported a 1 per cent gain in property values during the month, leaving the average home costing £169,042.

The increase helped to push annual house price growth into positive territory for the first time since March 2008.

Prices were 1.1 per cent higher than they were a year ago, based on the Halifax measure of comparing average prices during the three months to the end of December with the same period a year earlier.



But if prices in December are compared with those in the same month of 2008, the cost of the average home has risen by 5.6 per cent during the past year.

The group said house prices were now 9.4 per cent or £14,552 higher than when they reached their low in April.

It added that, during the final quarter of 2009, the cost of property rose at its fastest rate since 2006.

Martin Ellis, Halifax housing economist, said: "The significant cut in interest rates following the worldwide financial upheaval in the autumn of 2008 has markedly reduced the burden of servicing a mortgage for many households.

"This has helped to stimulate housing demand, albeit from a low base.

"The recent improvement in the labour market, highlighted by increased numbers of people in employment in both September and October, has also supported housing demand."

But he added that the prospects for the market during 2010 would depend on how the economy performed and whether there was a significant increase in the number of homes for sale.

Overall, he said the group expected house prices to remain flat during the coming 12 months.

The Halifax figure contrasted with the Nationwide ones, which showed a smaller 0.4 per cent rise in house prices during December, the lowest increase for eight months.

However, year on year they were much closer, with Halifax showing growth of 5.6 per cent, only slightly down on Nationwide's 5.9 per cent.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "Despite the further significant rise in house prices reported by the Halifax in December, we remain sceptical that the house price rally seen since early-2009 can be sustained for much longer.

"Consequently, while house prices may well rise further at the start of 2010, we suspect that they they will be prone to modest relapses during the course of the year."

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