Nationwide & Halifax House Price Surveys

FEB 04, 2010

The papers have been full recently of stories about rising house prices. Earlier reports from the Nationwide and the Halifax have been largely confirmed by official data from the Registers of Scotland and the Department for Communities and Local Government.

All the reports are actually referring to roughly the same period with the official data for December emerging in February about a month or two after the reports issued by the lenders and the RICS. But the sheer volume of reports and the coverage they receive risks giving the impression that prices are rising more strongly than is actually the case. The temptation is to assume that the property market is back to normal and that we are at the start of another steady rise in prices when that is far from the truth.

Certainly, there is good news coming through. Lloyds Banking Group (which now owns the Bank of Scotland and the Halifax) is gearing up to raise money in the markets by selling mortgages - yes the very RMBS (Residential Mortgage Backed Securities) that were at the heart of the credit crunch. The bank raised £4 billion last September this way and is hoping to raise another £2.5 billion now. The Co-operative Bank (which now owns what was the Britannia Building Society) is doing the same and also hopes to raise £2.5 billion.

Since retail deposits aren't going to be enough to support mortgage lending, the news that at least some banks can raise some money from the markets gives grounds for hope that mortgage availability might improve.

There are some signs that this is already happening. Mortgage Brain, which supplies mortgage information to financial advisers, says that nearly 1,000 new mortgage products were launched in January - the biggest monthly increase in product numbers for over a year. The company says that this is the seventh month in a row that product availability has increased, with products numbers up 78 per cent on the levels seen six months ago.