Conflicting House Price Indices

Halifax and Nationwide both released their respective house price indices last week for property prices in the UK to January 2018.

They both agreed that property rises had risen for the year to January 2018, albeit with a slowdown in December and January.  Halifax reporting an annual increase of 2.2% pa whereas Nationwide reported a 3.2% pa rise.  The difference can be as simple as to which property sectors they are most active in and the types of mortgages they are approving.

That said, for the month of January 2018, Halifax reported a fall in prices of 0.6% whereas Nationwide reported a 0.6% rise.

They both reported mortgage applications and completions falling in January, which adds to the general consensus that the housing market is slowing down. This is attributed to weaker, but stable market, due to inflation i.e. the cost of living still rising faster than wages growth.

Comment

The housing market, along with any other investment sector moves in cycles i.e. peaks and troughs.  That said, the Bank of England suggests that interest rates are expected to rise to curb inflation sooner rather than later added to the fact that the Bank now expects ages to rise faster than inflation, we expect there still to be some growth in property prices in 2018, albeit nor more than say 3% later this year after a cooling down period in the early part of 2018.