Halifax: firmer property market still lacks direction

High street lender Halifax is taking a fairly optimistic view of 2013 house prices after witnessing ‘broad stability’ in the market over the past twelve months.

The latest figures from the Halifax house price index show property prices increased 0.6% over the last quarter of 2012, the first time a quarterly increase has been witnessed since May 2012 following six consecutive falls.

House prices rose 1.3% in December, with six monthly rises and six falls during 2012 that took the average property to £163,845.

The increases at the end of the year could not, however, stop property prices from declining 0.3% over 2012.

Martin Ellis, Halifax housing economist, said: ‘There was evidence of a firming in the housing market in the final few months of 2012…Overall, last year saw an even mix of monthly rises and falls as prices lacked any real direction as both demand and supply pressures remained largely unchanged during 2012. On an annual basis, prices in the final quarter of 2012 were marginally lower than in the last three months of 2011.

‘We expect continuing broad stability in house prices nationally in 2013 with prices likely to end the year at levels close to where they begin,’ he added.

Despite predictions of stability, the lender, part of the Lloyds Banking Group, said the outlook for the UK economy and house prices ‘remains more unclear than usual’, as the market is constrained by subdued economic growth, unemployment and pressure on household finances, although low mortgage payments should support house prices.

The poor economic situation has not dented public confidence in the property market, with 38% of people taking part in the Halifax housing market confidence tracker believing that house prices will rise over the next year, while just 18% forecast a decline.

Before Christmas Hometrack forecast property prices would fall 1% on average this year.