Mortgage lender Halifax has published its House Price Index for 2011. The main points are that in the final quarter of 2011 prices were 0.1% below the figure for the previous quarter. Between November and December prices dropped by 0.9%
For the year as a whole house prices dropped by 1.3% which means that the average house was worth £160,063 at the end of 2011.
Halifax believe that if the UK can avoid recession house prices should be reasonably stable in 2012. However they point out that there is uncertainty regarding the prospects for the UK economy. Their housing economist Martin Ellis added “The extent to which households chose to reduce their debts will also affect growth. As a result, the outlook for house prices is also uncertain”.
If you are one of our landlord insurance clients you will probably have mixed feelings about these figures. If you bought a buy to let for cash several years ago you are probably sitting on a tidy profit. Equally, if you have borrowings your interest rate is probably quite low. The people who will be suffering are those who for various reasons are forced to sell now, in a very difficult market.
The National Association of Estate Agents has a view on the Halifax index. The Association believes that there is no such thing as a national housing market in the UK. Instead, they say it is a “landscape of micro-markets”. Their Chief executive Peter Bolton King says: “even towns and cities have micro-markets across different neighbourhoods”. This shows how careful you have to be if you are thinking of buying a let property – doing your research is absolutely crucial.