Take your pick: the first monthly fall in prices since April 2009 or accelerating price increases spreading to more of the country.
It’s not exactly unknown for the different house price indices to point in different directions but this time they appear to have really excelled themselves. On Friday the Nationwide said prices fell 1% in February while the Land Registry said they rose 2.1% in January. This morning Hometrack says that prices rose in a quarter of postcodes in February, up from just 7.6% in January.
Different timings and different methodologies explain some of the differences. Low sales make this far from a normal market. And the situation is complicated even further by possible distortions caused by the end of the stamp duty holiday in December and the bad weather last month keeping buyers away.
Nationwide chief economist Martin Gahbauer said it was too early to say whether the February fall was just a temporary blip or the start of a new trend. But he added that: ‘Even without the impact of stamp duty changes and the snowy weather, it would have been surprising to see house prices maintain the very strong upward momentum seen for most of 2009.’
To put that in perspective, any kind of increase in February would have seen the Nationwide’s annual rate of increase go back above 10%. That’s boom territory at a time when the economy as a whole is only just coming out of recession. However, the annual rate still increased to 9.2% because the 1% fall was less than the 1.5% dip recorded in February 2009.
The Land Registry figures are arguably the most comprehensive but they are also a month behind the two most closely watched indices produced by Nationwide and Halifax and so do not reflect the full impact of the stamp duty holiday and the weather. According to the Land Registry, the annual rate rising to 5.2% in January. Prices rose most in London and the South East but are still falling in the north of England.
Hometrack’s figures, which show the value of all property not just homes that have sold, look buoyant on the surface. There were more new buyers, a reduction in the average time on the market and an increase in the percentage of the asking price being achieved. However, February tends to be a good month for sales recorded in the survey and the 10% increase on January recorded this time was less than the 30% average seen over the last eight years. And the annual rate of house price inflation only moved into positive territory because no change in February was better than a fall this time last year.
Take the three surveys together and they look just about consistent with the data on mortgage lending, which has been slowing down since the end of last year. Will the slowdown become a new downturn? It’s still too early to say and definitely too early for the indices to agree.
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