UK House Price Inflation At 6-month High: Halifax

UK house price inflation accelerated more-than-expected in February to its highest level in six months, figures from the Lloyds Bank subsidiary Halifax and IHS Markit showed on Thursday.

The house price index rose 2.8 percent year-on-year following a 0.8 percent increase in January. Economists had forecast 1 percent growth in house prices. In December, house price inflation was 1.3 percent. Compared to the previous month, house price surged 5.9 percent in February, recovering from a 3 percent slump. Economists had expected a modest gain of 0.10 percent. In the December-February period, house prices climbed 1.8 percent from the September-November period. The average house price rose to GBP 236,800 from GBP 223,629 in January. "House prices have grown on an annual, quarterly and monthly basis for the first time since October 2018," Halifax Managing Director Russell Galley said. "The shortage of houses for sale will certainly be playing a role in supporting prices," Galley added.

That said, the 2.8 percent house price inflation is fairly subdued versus 2015 and 2016, when the average growth rate was 8.3 percent. "People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being," Galley said. Citing the number of sales in January of over 100,000 for the fifth consecutive month and which was right on the five year average, Galley said the overall resilience of the market is still evident.