Assetz® News - Assetz House Price Watch: House prices continue to rise but rate of growth is slowing

Assetz House Price Watch: House prices continue to rise but rate of growth is slowing

1st March 2010 |

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· Average house price figures for the first month of the year reveal 4.7% growth

· The average UK house price is now £194,168 compared to £185,499 12 months ago

· 6 month rolling average shows 5.94% annualised growth rate

· Rate of growth is slowing slightly but still likely to end 2010 with 5% annual growth

The latest figures from Assetz House Price Watch show that house prices were 4.7% higher in January than at the same time in 2009. Assetz House Price Watch compiles monthly average figures taken from all of the major house price indices to offer a more accurate picture of house price trends.

The average house price, ascertained from the five major UK indices, was £194,168 in January. This is a £8,669 increase on figures for January 2009 and represents 4.7% growth year-on-year. Average house prices are currently at the highest level since October 2008 (£194,735).

The latest figures also eliminate the slight fall in the average house price in December and suggest continued growth in 2010.House prices are now less than 10 per cent (9.73%) below the peak house price of £215,089 recorded in October 2007.

The annualised growth figures reveal that while the UK continues to see positive growth, the rate of growth continues to slow. The three month rolling average data shows a current annualised growth rate of 2.28% compared to 4.29% last month. The six month rolling average data shows 5.94% annualised growth rate in January, down from 7.79% in December and a high of 11.93% in October 2009.

Stuart Law, Chief Executive of Assetz, comments:

“The latest Assetz House Price Watch shows that the monthly rate of house price growth slowed over Christmas but is now rising again. However, the six month average is a more reliable indication of trends and suggests that while growth continues, it has slowed from its historic high of almost 12 per cent in October to a more sustainable level.

“I would expect the annual rise in February to be around 5%, up on January’s figure of 4.7% and predict overall modest growth of 5% by the end of the year. Rightmove, a leading indicator of asking prices, witnessed monthly house price growth of 3.2% in February as sellers increased asking prices due to the reduced levels of stock on the market. This rate of growth - which translates as 46% annualised growth – is wholly unsustainable. However, as a result of increased asking prices, we would expect an increase in the agreed price that appears in the Nationwide and Halifax indices next month.”

For further information please contact:

Suman Hughes or Laura Scarrott, The Wriglesworth Consultancy:

020 7427 1400 s.hughes@wriglesworth.com, l.scarrott@wriglesworth.com

About Assetz House Price Watch

The Assetz House Price Watch is an overview of the data supplied by the five main house prices indices: Acadametrics HPI (previously FTHPI), Rightmove, Nationwide, Halifax and the CLG (Communities and Local Government).

Assetz believes that individual monthly movements in individual indices from specific providers should not be taken as an indication of the market. Property is an illiquid asset and such minor monthly fluctuations for specific indices are not directly attributable to the sentiment of buyers, but rather more a sample of the data used in that particular month. Therefore there would be an inherent likelihood of it misrepresenting the market as a whole in a single month timeframe.

By taking 12-monthly house price growth data from all transactional indices and then averaging them, it is possible to gather a more accurate picture of how the market as a whole is behaving. The current month’s data is used from each index, wherever possible. If this is unavailable, the most recently available data is substituted.

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