Studies give differing views of house prices

TWO house price indices were published yesterday giving slightly differing views of prices - one showed a rise during January of 1.2 per cent and the other a fall of 0.4 per cent. But both the Halifax and Nationwide building societies, which produced the contrary reports, see some signs of life in the housing market.

The optimistic note from the Nationwide Building Society showed the largest jump in house prices since May 1991, and slows the annual house price fall from 8.4 per cent to 6.2 per cent. But the future still remains uncertain. A Nationwide spokesman said: 'It would be a brave man who would predict that next month's figures would be up as well.'

Tim Melville-Ross, Nationwide's chief executive, said: 'The rise in January follows a marginal fall of only 0.2 per cent in December. Taken together, we see the December and January figures as encouraging signs that stability may now be returning to the housing market. There are grounds for cautious optimism, but one swallow does not make a summer.'

The Halifax Building Society, Britain's largest mortgage lender, reported a further fall in January, making an annual decline of 7.7 per cent. But it also detects signs of revival in the housing market.

Estate agents have been busy and there has been an upturn in mortgage applications. But these only feed through to the house price statistics when a formal mortgage offer is made.

'Market activity is expected to show a stronger recovery by the spring, by which time buyers will be receiving the benefit of the latest mortgage rate reduction,' Halifax's monthly bulletin says.

It reports that the average house has fallen in value from pounds 61,169 at the end of 1992 to pounds 60,471. While the Nationwide's average property has risen from pounds 51,862 to pounds 52,507.