House Market Data

The outlook for the housing market has brightened and steady house price inflation should support spending as consumers borrow against the value of their homes, according to a Reuters poll of 21 housing experts.
Median forecasts in this week's survey showed house prices -- based on the main house price indices -- would be six percent higher in the fourth quarter this year from the same period a year ago, up from 3.5 percent forecast in February's poll.

Housing market activity has picked up since the start of the year as confidence has grown that last year's downturn, when house price inflation fall to low single digits from a peak of more than 25 percent growth in 2003, is over.
The Halifax, Britain's largest mortgage lender, said its 3-month annual rate of house price inflation picked up to 8.0 percent in April, its highest in 13 months, while Bank of England data showed mortgage approvals jumped by the biggest amount since November 2003 in March.

"There is plenty more upside given the latest mortgage approvals figures but it may not necessarily get to 20 percent year-on-year," said Alan Clarke at BNP Paribas in London. The rebound in house prices also bodes well for consumer spending in Britain where two thirds of households own their homes. Retail sales, hit by a decline in consumers' appetite for debt in the last year as house price inflation eased, rose by more than expected in April.

Mortgage equity withdrawal -- where homeowners refinance home loans to extract cash -- also rose to the highest level in more than a year in the last three months of 2005 and many economists -- 10 of 18 -- expect to see further rises."It will help consumer spending as people have this resource they can tap into to augment their take-home pay," said Clarke, adding that this was one factor which may prompt the Bank of England to eventually raise interest rates from 4.5 percent.

House prices are set to rise by 3% during the year, barely enough to keep pace with inflation, the Halifax said.
A crash would be avoided due to high levels of employment, wages rises and interest rate cuts, the group added.
But at the same time,- well known market sceptics - Capital Economics warned that house prices could fall 5% in 2006. House prices rose by 2.0% in April and by 4.4% in the first four months of 2006, the bank has said. April's price rise was considerably up on March's figure of 0.9%. Halifax expects prices to rise further over the summer but then level off later in the year due to a "softening" of the labour market.

The Bank of England revealed that mortgage lending jumped by the biggest amount in two and a half years during March. Mortgage lending rose by £9.3bn compared with a forecast of £8.6bn. Loans agreed for house purchase rose to 116,000 in March from 114,000 in February. The strong showing by the UK housing market took many economists by surprise, particularly as the most recent data from the Nationwide had indicated that house price inflation was slowing.