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Halifax says house prices have stabilised | Halifax says house prices have stabilised |
(about 6 hours later) | |
House prices have stabilised, according to the latest survey from the Halifax mortgage lender. | House prices have stabilised, according to the latest survey from the Halifax mortgage lender. |
It says the cost of the average UK home rose by just 0.2% in August to £167,953. | It says the cost of the average UK home rose by just 0.2% in August to £167,953. |
That figure was only slightly lower than at the end of 2009 and is still 16% below the peak of August 2007. | That figure was only slightly lower than at the end of 2009 and is still 16% below the peak of August 2007. |
Despite the small increase in prices during last month the annual rate of increase declined further, from 4.9% in July to 4.6% in August. | Despite the small increase in prices during last month the annual rate of increase declined further, from 4.9% in July to 4.6% in August. |
The Nationwide said last week that prices were now only 3.9% higher than a year ago. | The Nationwide said last week that prices were now only 3.9% higher than a year ago. |
"Prices are now at a very similar level to that at the end of last year," said the Halifax's chief housing economist Martin Ellis. | "Prices are now at a very similar level to that at the end of last year," said the Halifax's chief housing economist Martin Ellis. |
"Activity has also been largely static since the start of the year. | "Activity has also been largely static since the start of the year. |
"These developments suggest that the market is broadly stable, with house price inflation having cooled since last year, when supply shortages helped to push up prices," he explained. | "These developments suggest that the market is broadly stable, with house price inflation having cooled since last year, when supply shortages helped to push up prices," he explained. |
Top lenders | |
Separate figures from the Council of Mortgage Lenders highlight the collapse of mortgage lending in the past two years. | |
Last year, gross lending was only £144bn, which was less than half the amount lent in 2007. | |
One side-effect of the collapse of some lenders, and the continued rationing by others, is that the five biggest lenders controlled 82% of all lending - up from 62% in 2007. | |
The five were the Lloyds banking group (including the Halifax), Santander (including the former Abbey bank), the Nationwide building society, Barclays and RBS. | |
The nationalised Northern Rock was the sixth largest lender with a nearly 5% share. | |
"In 2009, therefore, firms were operating in a rationed market, with much lending activity driven by a small number of large banks, some of which were wholly or partly state-owned," the CML said. | |
"Building societies, with a few notable exceptions, were largely hibernating, and non-banks were often comatose - unable to write new business without access to new sources of retail funding. | |
"These conditions continue to afflict the mortgage market today and will not change soon," the CML warned. | |
'Difficult market' | |
Meanwhile, housebuilder Barratt has reported improved earnings, but a market still stuck in first gear, in its full-year financial results. | Meanwhile, housebuilder Barratt has reported improved earnings, but a market still stuck in first gear, in its full-year financial results. |
The homebuilder showed a full-year loss of £33m, down from £144m the previous year. | The homebuilder showed a full-year loss of £33m, down from £144m the previous year. |
Despite the steadily improving conditions, "by historic standards the market remained difficult and activity levels continued to be extremely low," the company said. | Despite the steadily improving conditions, "by historic standards the market remained difficult and activity levels continued to be extremely low," the company said. |
The company blamed the continuing lack of mortgage finance for constraining demand, saying the housebuilding industry had responded by opening fewer new sites. | The company blamed the continuing lack of mortgage finance for constraining demand, saying the housebuilding industry had responded by opening fewer new sites. |
"Whilst the improved balance between supply and demand has stabilised prices, it has done little to address the nation's fundamental housing shortage," it added. | "Whilst the improved balance between supply and demand has stabilised prices, it has done little to address the nation's fundamental housing shortage," it added. |