According to the Halifax, property prices in the UK rose by 0.6% last month which more or less wiped out the previous months decline of 1%, while property prices fell by 1.8% during the three months to January compared to the same period a year ago.
However if you had read an earlier report on Reuters, then you would have seen that the Nationwide released data showing house prices declining by 0.2%, which is a difference of 0.8% between the two major lenders. The average price of a home is now £160,907, but overall house prices have remained more or less steady since last spring. Mortgage payments are currently at their lowest level for 14 years, mainly thanks to low interest rates, and an improvement in employment levels have also helped support the demand.
Britain’s property market is normally a major force behind much of the country’s consumer spending, but has remained flat since the financial crisis. Most economists expect it to hold steady this year provided the economy doesn’t worsen. However the market is still being constrained by lack of funding, with many suitable applicants being turned down. First-time buyers are now making down payments of 20% or more whereas in 2008 10% was the average. Although it is possible to find mortgages which require lower deposits, the interest rates offered tend to be far less favorable. Looking on the brighter side, it does cost far less to service mortgages now with average payments costing 31% of take-home pay compared to 46% in 2008.
So is it worth paying much attention to data released by these lenders? The answer is probably yes as they do give at least some indication of what is happening, and there will always be some margin of difference, but it is difficult to know how much the figures are skewed, especially as the London real estate market continues to outperform the rest of the country.