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House prices up 4% in 2019 after a £4k December bounce, says Halifax

House prices bounced £4,000 in December to deliver a 4% rise in 2019, but Halifax forecasts only ‘modest’ gains for the year ahead

  • Halifax said average house price rose £9,000 to £238,963 in 2019
  • But bank’s house price figures have consistently outstripped rival reports
  • Nationwide last week reported house price inflation of 1.4% for 2019
  • Britain’s biggest mortgage lender forecasts small property price gain in 2020 

House prices rose 4 per cent in 2019, according to Britain’s biggest mortgage lender Halifax, as a December bounce saw the average property value jump £4,000.

The Halifax house price index showed the average property’s value climbed £9,136 last year to £238,963, but the bank said that it only expected ‘modest’ rises in the year ahead.

Halifax’s figures are based on the lender’s own mortgage approvals and have consistently outstripped rival reports over the past year.

Halifax said that a £4,000 December bounce in house prices led to 4% property inflation in 2019, but the lender’s figures have regularly outstripped those of rivals

Rival mortgage lending giant, Nationwide Building Society, reported last week that its index showed house prices rising just 1.4 per cent in 2019, with the average property value up £4,126 to £215,282.

Official house price statistics from the ONS / Land Registry, based on sold prices, lag both the big mortgage lenders’ reports and showed the average property up 0.7 per cent in the year to October.

Property industry commentators have suggested over the past year that the Halifax index may be overcooking house price rises, but Jeremy Leaf, a north London estate agent and Rics residential chairman, said it had ‘proved to be a reliable indicator of property market activity over many years so is widely respected’.

He added: ‘On the back of the largest monthly increase for the year in November, prices are up even more in December on a monthly and annualised basis.

‘But price rises are reflecting more of a shortage of stock at the moment than significant increases in demand and not widely in London where affordability is most stretched.’

‘On the ground, there is no doubt that the election and more certainty on Brexit is contributing to recovery in market confidence. Looking forward, we expect higher increases in values in areas where the ratio of house prices to earnings is lower.’

Halifax's chart shows the dramatic pick-up in annual property inflation at the end of last year

Halifax’s chart shows the dramatic pick-up in annual property inflation at the end of last year

Halifax managing director Russell Galley said that the 4 per cent rise for 2019 was at the top of its 2 to 4 per cent expectation for the year.

He said: ‘This was driven by a monthly gain of 1.7% in December which was the biggest monthly increase of 2019, pushing up the year-on-year growth rate and reflecting that December 2018 was a particularly weak month.

‘Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.

‘Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.’

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