Index (seasonally adjusted) 451.2
Monthly Change 1.0%
Annual Change 14.1%
Standardised Average Price (seasonally adjusted) £139,405
Annual house price inflation now stands at 14.1%, down from an annual rate of 16.7% reported last month - but significantly above the long term average of 8%.
The average homeowner in the UK is currently paying 13.6% of their post tax income to support mortgage payments. Over the last 20 years households have been paying an average of 21% of their take home pay in mortgage payments. This figure reached a peak of more than 36% in 1990. For mortgage payments to equal the long term average, bank base rates would have to rise to 6.25% - and for them to reach the peak of 36%, bank base rates would need to rise to 10%.
In separate research to be released later this week, Halifax has looked at the sale of £million properties since 1995. Overall 12,168 properties worth more than £1m have been sold in England and Wales since 1995. Unsurprisingly, the London districts of Kensington & Chelsea and City of Westminster have consistently topped the £1m plus sales table by a wide margin. 2003 has been the year of the North (albeit from a low base) as nine districts outside London and the South East recorded their first £1m transactions in the first half of 2003.
Commenting, Martin Ellis, Chief Economist, said:
"House prices rose by 1% during November and are now 14.1% higher than a year ago. The gradual easing in house price growth reflects a market returning to average house price rises after two years of exceptional increases."
ABOUT THE HALIFAX HOUSE PRICE INDEX
The Halifax House Price Index is the UK's longest running monthly house price series with data covering the whole country going back to January 1983. The Index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. From this data, a "standardised" house price is calculated and property price movements on a like-for-like basis (including seasonal adjustments) are analysed over time. Properties over £1 million are included and the index is seasonally adjusted with the seasonal factors updated monthly.
THE UK ECONOMY REMAINS STRONG AND EMPLOYMENT LEVELS REMAIN STABLE...
Several key UK economic indicators continue to show that the UK economic growth is strong. A continuing improvement in employment levels continues to underpin the economic revival as well as being one of the fundamental pillars of the UK housing market. The unemployment rate was 5% in the three months to September, unchanged from the preceding three months to June.
HOUSING TRANSACTIONS ARE STABLE BUT STILL REMAIN LOWER THAN LAST YEAR…
According to Inland Revenue statistics, during the first 10 months of the year there have been just over 1.12 million property transactions in England and Wales. This is 200,000 lower than the 1.32 million transactions recorded in the corresponding period in 2002. It is likely that the number of transactions during 2003 will be lower than the level seen in 2002 (1.58 million), but will be around the same experienced during the preceding 3 years at approximately 1.4 million.
THE NUMBER OF MILLION POUND PROPERTIES BOUGHT IN THE UK STARTS TO DECLINE
In separate research to be released later this week, Halifax has looked at the number of £1m properties sold since 1995. There have been over 12,000 properties worth more than £1m which have been sold in England and Wales during the past 9 years. Unsurprisingly, districts in London have consistently topped the £1m plus sales table by a wide margin. Although the pace of growth of million pound properties being bought and sold has slowed, a number of districts outside London and the South East have recorded their first £1m transactions in the first half of 2003. There are still over 100 local authority districts in England and Wales (out of 377 districts) yet to experience a £1 million plus sale.
ALTHOUGH CONSUMER CREDIT REMAINS HIGH, AFFORDABILITY REMAINS GOOD…
Bank of England figures show that net lending to individuals grew by £10.7 billion in October, slightly lower than the figure for September. Although consumer credit remains high, historically low interest rates means that borrowing is still very affordable. The average borrower is currently spending 13.6% of their average gross earnings on mortgage interest payments, well below the long run average of 21%. Recent CML figures show that around a third of all new borrowers are electing to take a fixed rate mortgage thereby protecting themselves from any possible changes to interest rates. Figures from the Halifax, the UK's largest provider of fixed rate mortgages, show that the most popular term for fixed rate loans is currently 3 years.