MNI DATA ANALYSIS: UK Annual House Price Gains Slow in Feb

--Halifax UK February House Prices +0.4% m/m; -0.7% 3m/3m; +1.8% 3my/y

By Jai Lakhani

     LONDON (MNI) - UK house price inflation on a monthly basis rose 0.4% in

February, with the modest uptick coming off the back of two consecutive monthly

falls. Annually, gains decelerated to 1.8% on year, below the 2.2% seen in

January.

     On a quarterly basis, house prices fell 0.7% in the December-February

period relative to the September-November period according to data from Halifax,

the UK's leading mortgage provider.

"House prices continue to remain broadly flat, as they have since the end of

last year. The annual rate of growth has slowed from 2.2% in January to 1.8% in

February, the lowest rate of growth since March 2013," said Russell Galley,

Managing Director, Halifax Community Bank.

     The sclerotic price action was despite a labour market which continues to

perform strongly, with the number of people in employment up 88,000 in the three

months to December. However, this is arguably being offset by "earnings rising

at a slower rate than consumer prices" Galley said which suggests wage growth

still needs a boost for demand to start impacting house sales. 

     Galley however argues that future house prices should be supported over the

coming months through a "...low mortgage rate environment, combined with an

ongoing shortage of properties for sale...". 

     This could be illustrated further by the fact that mortgage approvals grew

9.4% m/m in January and monthly UK home sales exceeded 100,000 for the

thirteenth month in succession. Whether this is strong enough to fuel future

house price growth is questionable with both mortgage approvals and UK home

sales on a 3 month to January basis being higher a year earlier by 2.4% and 2%

respectively. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

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