The Halifax blames poor growth in wages for the continued slowdown in house prices.

The Halifax say's low wage inflation is putting a check on house price growth!

The bank commented that prices in 2014 rose by 7.8% - significantly down from their peak in July, when prices had increased by 10.2% compared with a year earlier. In the three months to December, the cost of a home went up by only 0.3% - highlighting five months of declining quarterly inflation. The Halifax says that slow growth in real-terms wages was one of the main reasons.

The Halifax's chief economist, Martin Ellis, expressed the view that earnings growth has been consistently below consumer price inflation until very recently. For the first time in five years, average weekly earnings overtook inflation in September 2014. Figures published in December showed average weekly earnings - excluding bonuses - rising by 1.6% a year.

Inflation is at present running at just 1%, as measured by the Consumer Prices Index (CPI). The Halifax also reported that another reason for moderating prices was that homes had become less affordable. The average price of a house or flat in the UK is now £188,858, said the Halifax.

Tony Wing DipsSurv FNAEA MRICS
Sales Director
Lincoln Office
Tel: 01522 538888
Email:tonywing@robert-bell.org
Twitter: @robertbellandco

Comments

Commenting is not available for this blog.