Twitter Facebook RSS FEEDS

Rate cut causes house prices to rise

Wednesday, 7 September 2005 12:00 AM

House prices rose by 1.6 per cent in August, the biggest monthly gain for 11 months, new figures show.

Halifax says the rise, which follows a 0.4 per cent gain in July, is a result of the Bank of England's interest rate cut; although it warns that the upturn in the market is only likely to be temporary.

The average house price in August was £165,967, up from £164,994 the previous month.

Long-term trends continue to paint a picture of a stuttering housing market, with prices increasing only 2.1 per cent in the first eight months of 2005, compared to a 12.5 per cent increase over the same period in 2004.

Annual house price growth was only 2.5 per cent in August 2005, compared to 21.3 per cent in August 2004.

Halifax chief economist Martin Ellis said August's house price rise was consistent with the pattern of previous house price movements when the Bank of England started to reduce interest rates.

An analysis of the initial rate cuts in previous periods of Bank of England rate reductions in 1998 and 2001 shows that house prices rose by significantly more in the month after the initial cut.

In October 1998 house prices rose by 1.1 per cent following a 0.4 per cent rise the previous month, and in February 2001 they rose by 1.6 per cent following a 0.3 per cent rise the previous month.

But in both cases the pick-up in house prices did not last.

Halifax is predicting housing market activity to remain broadly stable for the rest of 2005.

Mr Ellis said: "The ongoing growth of the UK economy, robust earnings growth and historically high levels of employment all underpin the housing market.

"The slowdown in economic growth in 2005 and the high level of house prices in relation to average earnings will, however, continue to curb housing demand and should prevent a renewed surge in house prices."

The latest figures from Halifax reveal a divergence in the two main house price indices, with Nationwide reporting a 0.2 per cent fall in prices in August, cancelling out July's rise of 0.2 per cent.

Related stories

New sellers increased their prices by an average of £3,687 in March alone. Image:Thinkstock

Asking prices rise at fastest rate for eight years

Big question is whether the market bounce will survive the end of the stamp duty holiday, says Rightmove.

Almost half of people questioned think that property prices in their local area are above fair and reasonable levels.

Surge in buyers expecting house prices to rise

One in three home movers now expect prices to be higher in a year’s time, says Rightmove.
Bank of England

Number of Brits expecting a base rate rise falls

The number of people expecting a rise in interest rates has declined by a fifth, according to the results of a new survey issued today.

 Row of terraced houses in London

House prices rise £30 per day

The average house price has risen by £5,478 compared to six months ago, accprdomg tp figures out today.
House prices have been flat since October 2010.

'Temporary' rise in house prices set to cool

Rush by first-time buyers to beat end of stamp duty holiday caused price rise in February, says Nationwide.

Restrictions in the planning system are not the cause of rising house prices, says a Bank of England policymaker. Image:Thinkstock

House prices set to rise ahead of incomes for years

Rising incomes and a growing population will drive up prices, warns David Miles of The Bank of England.

House prices in market towns have risen by £1,000 a month on average over the last decade, say Lloyds TSB. Image: Thinkstock

Market towns enjoy £1,000 a month house price rise

Over the last decade house prices in market towns have risen by £1,000 a month on average say Lloyds TSB.

 Row of terraced houses in London

Brits think house prices will rise over next year

More Britons expect house prices to rise rather than fall over the next 12 months, the results of a survey released today claim.
Man hoovering property

The most common causes of deposit return hold-ups

Find out the most common reasons for landlords withholding all or part of a tenant's rental deposit.

 Price of terraced homes rose £118 a day over the last decade, says Halifax survey. Image: Thinkstock

Terraces see highest house price rise

Price of terraced homes rose £118 a day over the last decade, says Halifax survey.

Search property

Headlines

Directory

Alaris

Alaris Logo
Alaris specialise in quality Bathrooms and Kitchens along with many other unique products for your home. The range of kitchens, kitchen worktops and bathrooms is extensive and the highest quality so you are sure to find what you want. New bathroom furniture, bathroom suites, taps, showers and cabinets are added regularly.

Bathrooms365

Bathrooms365 Logo
Bathroom365 supply all areas of your new bathroom - leading-edge designed bathroom suites, stylish bathroom taps and showers, all styles and forms of shower enclosures and a vast collection of bathroom furniture.

Fitmykitchen

Fitmykitchen Logo
Fitmykitchen are specialist suppliers of kitchen appliances, sink taps, waste bins and furniture. So whatever you want from kitchen sink taps to waste bins look no further than fitmykitchen, UK, the specialist suppliers of kitchen appliances, stainless steel sink taps, waste bins and kitchen furniture.

MyStampDuty

MyStampDuty Logo
We help people buying property all over the UK to minimise Stamp Duty Land Tax on residential and commercial property. If you are looking at purchasing a new home or business premises over £500,000, contact us today by completing the form on the right

Oak Furniture Land

Oak Furniture Land Logo
For hardwood furniture, including Solid Oak, Mango, Mahogany, Sheesham, Acacia, Ash and Birch, look no further than Oak Furniture Land.

Rated People

Rated People Logo
Whatever type of home improvement or garden remodelling project you have, Rated People can help you to identify the right tradesmen for the job in a way that is quick, easy, convenient and, as it is based on real-life recommendations, trustworthy.

Residential Land

Residential Land Logo
If you are looking for short or long term rentals in Central London, Residential Land have a portfolio of over 1200 flats and houses in the best postcodes across the Capital.

Simply Bedrooms

Simply Bedrooms Logo
Simply Bedrooms, a part of Sleepwell Bedrooms Ltd, supplying quality beds, wardrobes, sliding door wardrobes and bedroom furniture at low prices and great service, London and Home Counties Specialists.

Door Handles UK

Door Handles UK Logo
Door Handles UK is the UK's largest online range of Door Handle accessories, Door Hinges, Locks and Latches and so much more and all at genuine internet prices. We have a wide range of Chrome, Brass and Glass Crystal Mortice door knobs in both traditional and contemporary designs, whatever your taste and budget you will find a design to suit.

Woodlands Furniture

Woodlands Furniture Logo
We are an established family business situated in rural Herefordshire specialising in beautiful handcrafted classic reproduction furniture. Our comprehensive ranges are readily available from stock.

WowBBQ

WowBBQ Logo
Welcome to the World of Weber. We are the largest independent online Weber BBQ retailer in the United Kingdom. WOWbbq.co.uk is a Weber Partner Store and can give you the best advice for all your Weber BBQ needs.

Join our directory aboutproperty.co.uk

Twitter

Join the conversation at #aboutproperty

Directory articles

A guide to finding the right kitchen sink

When redesigning a kitchen or giving the room a makeover, it is important not to forget about the less obvious aspects of the space. Kitchen sinks are an essential fitting, but often overlooked, despite the fact there is a wide choice of styles available.

Useful tips to help find a flat in London

Looking for flats in London can be a frustrating process, given the capital's size, demand for rental accommodation and varying prices. It is vital, therefore, that you do plenty of research and act quickly to ensure you get the place that you want.

What do you need to consider when buying a mattress?

If you looking for a new mattress, you need to get the decision right, as getting it wrong could impact on your overall health and wellbeing. As well as comfort and size, you also need to consider other points, such as any health issues you may have.