Although Halifax (6 Aug 12) report a 0.6% fall in house prices in July 2012, they also note that prices remained stable over the preceding 3 months.
So what is going on?
Is this merely some bizarre Olympic / Jubilee inertia? Or may it be down to people waiting to see which way the UK Government is going to direct the latest provision of additional funds for the Banks to lend out (more semi-covert quantitative easing?).
While Martin Ellis. Halifax’s Housing Economist, fudges the issue by merely putting this down to the ‘static nature’ of supply and demand over the previous 12 month period, we think that the mortgage finance sector in general should be attempting better analyses of the true underlying nature of the housing market.
With Government, supported by the house-builders in general, claiming that there is pent up demand for circa 1.5m new homes, a level which is being added to at the rate of something over 100,000 per year, demand is far outstripping supply.
This is surely NOT ‘static demand’ – even if the supply is! BUT – is this the case? Or is it just that people are deciding to stay put and NOT move house?
All the indications that we are receiving is that people are doing just this – staying put, improving their homes and adding extra space where needed.
This all begs a much more important question about the nature of the way UK housing demand is changing. Involving Government’s approach to planning and social as well as economic conditions (e.g. part time working and the localism agenda), we would expect those who are supposed to know and be capable of considering these matters not just to take this kind of easy ‘cop-out’.
If demand really is outstripping supply then house prices could be about to rise.,
