Image credit: Flickr/Raphael Chekroun

Halifax: 'house prices have actually dropped'

Another day, another house price index - but this time it showed prices fell by 0.6% between May and June. That's news the chancellor wants to hear.

by Emma Haslett
Last Updated: 28 Nov 2014

Remember that game, six degrees of Kevin Bacon, which essentially proved all actors are linked somehow to EE’s favourite 90s movie star? We could play the same thing with house prices: in economics, anyway, everything is linked to how much the average house costs.

So the fact that Halifax published figures this morning showing house prices fell 0.6% between May and June is not just good news for would-be buyers, it’s also pretty pleasing for the likes of Mark Carney and George Osborne. Carney, because house prices were the last remaining serious pressure on him to increase interest rates; Osborne, because - well, out-of-control house prices aren’t exactly vote winners, are they.

It’s the fourth monthly drop in prices since last December - although the index’s quarterly measure showed prices grew 2.3% in the three months to June and 8.8% from the same time a year earlier, up from 8.7% in May. The average house price is now just over £183,000 - which, as this chart suggests, still isn’t as much as it was in 2007:

What now for Carney’s inflation plans? There had been hints he might try to raise the bank rate at some point this year, but with house price growth cooling, it looks like analysts’ predictions of early 2015 are pretty spot on. Borrowers, brace yourselves.

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