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Halifax house price survey shows strong recovery

The Halifax House Price Index for October shows a monthly rise in house prices of 1.2%, a great deal more than the Nationwide index for the same month (0.4%). The most recent Hometrack and land registry surveys were for September, so we cannot compare those numbers for a few more weeks.

The Nationwide index shows a 2% annual rise in prices, whereas Halifax shows a 4.7% fall. This is probably the result of the different regional mix: the Hometrack survey showed a wide variation in price changes across regions.

The housing market has recovered strongly. The average house price to earnings ratio is now back to 4.68 (according to Halifax numbers), which is high by historical standards. We could see a sustained (although unlikely to remain this rapid) recovery, but prices remain very vulnerable to interest rate rises or continued poor economic performance (the UK, unlike the US, is still in recession).

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