UK house prices show surprise spike higher in February - Halifax

Business reporter(wp/reuters):::
British house prices showed their biggest monthly jump since at least the 1980s in February, leaping by 5.9 percent from January, data from mortgage lender Halifax showed on Thursday.

But economists said the monthly index was volatile and Brexit uncertainty was still probably weighing on the market.

In annual terms, prices were up by 2.8 percent in the three months to February, the lender said, the biggest rise by that measure since August 2018.

A Reuters poll of economists had pointed to a 0.1 percent increase on the month and a 1.0 percent annual rise in prices.

A Halifax spokesman said the monthly figure was in part a rebound from a sharp 3.0 percent fall in January. Halifax had also seen a disproportionate increase in house sales in southeast England, where prices are typically higher than elsewhere.

“This has played a part in the movement given the importance of the region,” the spokesman said.

Russell Galley, managing director at Halifax, said house prices had risen in annual, quarterly and monthly terms for the first time since October last year.

“Annual house price growth at 2.8 percent is within our expectations, but is fairly subdued compared to 2015 and 2016, when the average growth rate was 8.3 percent,” he said.

Britain’s housing market has slowed ahead of Brexit although some indicators recently, including a rise in mortgage approvals, have suggested more interest among buyers, albeit nothing on the scale of Halifax’s price jump.

Another mortgage lender Nationwide said last week its measure of house prices showed only a small pick-up in February.

Samuel Tombs, an economist at Pantheon Macroeconomics, described the size of February’s pick-up in the Halifax data as implausible.

“All other indicators suggest that house prices essentially are on a flat trend,” he said. “The support to house prices from the combination of faster growth in nominal wages and extremely low unemployment is being offset, for now, by anxiety about Brexit.”