House prices strengthened unexpectedly in December after three successive monthly falls, Halifax’s index showed yesterday, but analysts said the rebound was unlikely to signal an end to the housing market slowdown. Financial Times, The Times, The Independent
Halifax said house prices rose by 1.3% last month, beating forecasts of a 0.5% fall. But prices in the fourth quarter of 2007 were 0.8% below their level in the third quarter, and Halifax said the annual increase of 5.2% was below the longterm average of 8% for only the second time since 2001.
The pound strengthened after the survey’s release, with the lack of compelling evidence to support a cut in interest rates at this week’s meeting of the Bank of England’s monetary policy committee, in spite of calls for a second swift cut from several industry bodies.
Most analysts think rates are on their way down but expect the Bank to hold its next move until February, when it updates its own economic outlook in its inflation report.