House prices fell in January, for the first time in eight months according to the latest data from the Halifax, which shows that the average house price reduced by around 0.4%. Although this is not a significant change, the news dampens the positive outlook forecast by other property market indicators.
However, agents are finding that the Country House Market is very much afloat, with an unseasonably high number of transactions, especially on properties around the £2million mark. ?Most country house owners will be thankful that 2005 saw their property value come back to a level last seen in the summer of 2004,? said Liam Bailey, Head of Knight Frank Research.
The Halifax figures are a stark contrast to the 1.4% rise recorded by the Nationwide?s January data. However, despite the monthly decrease, the average rate of house price inflation, a three-month moving average of the annual rate, was unwavering at 5.1%.
Property economists see the Halifax?s figures as a reminder that the housing market has not quite yet turned the corner. Martin Ellis, Chief Economist for the Halifax said: ?Despite this fall, prices have increased by 1.6% over the past three months as the market has strengthened. A mixed pattern of monthly price rises and falls is a typical feature of a slow housing market.?
The recovery in completed sales gathered pace in the final quarter of 2005, according to the latest Royal Institute of Chartered Surveyors (RICS) survey. In addition, the number of new buyer enquiries increased for the seventh successive month in December, marking the longest unbroken run since 1999. RICS supports the Bank of England?s decision (February 9) to leave interest rates unaltered. ?The recovery in the housing market since last summer has been maintained. The number of new buyers has risen for seven consecutive months, while the number of property sales has risen by 13% over the past year,? says RICS chief economist Milan Khatri.
However, RICS believes the Bank of England should examine the need for a spring-time interest rate cut in the months ahead.
Knight Frank meanwhile predicts the prime property market will lead the way this year: ?Our forecast is that prices of prime country properties will grow by 4% this year, with price growth of up to 7% for the very best properties. This compares to our forecast of 2.5% for the UK market as a whole,? said Mr. Bailey.