Is a House Price Boom Coming Soon?

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  • Halifax: house prices shot up 5.9% in February
  • Buyers on panic alert about “missing the boat”

If you thought the property market was due for a Brexit crash or at least another year of prices going nowhere, you would have got an almighty shock when the Halifax House Price Index for February 2019 was released recently.

The data showed prices had increased by a huge 5.9% in February, the biggest monthly increase since 1983. A continuation of that level of growth over the rest of the year would lead to an eye-watering rise in house prices.

The increase pushed annual growth up to 2.8% , from under 1% the previous month.

What does it all mean for buyers?

Is the unlikely Brexit property boom on the way?

Do you need to rush out and buy fast before prices shoot up even further in the coming months?

Is there a real and present danger that you could miss the boat and be priced out of the market?

What do you do, hold your nerve or jump to buy as quick as you can?

Thankfully, if history is anything to go by, there is absolutely no need to rush out and buy – unless  that was something you were already planning to do.

One swallow does not make a summer, and one month of stunning data does not determine the short term, never mind the long term future of house prices.

This blog reveals the 5 important reasons why you shouldn’t bank on an impending property boom:

1. One month’s data is not reliable

2. Relying on the results of just one data provider is not safe

3. Several experts have doubted the reliability of Halifax’s figures

4. There are no clear underlying factors explaining the sudden jump 

5. The general picture suggests a period of weak growth or price falls.

1. One month’s data is not reliable.

The biggest point is that the huge 5.9% growth in February is the result of just one month’s data.

You need to see data for at least 3 months to be even thinking of predicting future price movements.

That is made all the more obvious by the fact that Halifax’s January index indicated a 3% drop in prices nationally.

Such erratic shifts make it impossible to be confident of the direction of the market.


2. Relying on the results of just one data provider is not safe

An obvious cause for caution is that Halifax’s stats are not so far supported by other house price indices.

For instance, Nationwide’s House Price Index indicated that prices were up just 0.4% in February compared to a year previously.

The Nationwide figures are consistent with the latest data from providers such as the Land Registry, Zoopla and Rightmove – all of which point to a fall or slowing of prices.

3. Several experts have doubted the reliability of Halifax’s figures

Given the volatility of Halifax’s numbers – down 3% one month, up 5.9% the next – the Guardian and the Telegraph have reported doubts about their reliability.

The Telegraph has noted that in recent times Halifax’s figures have tended to be more volatile than other house price data providers.

The volatility of Halifax’s figures is a very good reason to doubt them.


4. There are no clear underlying factors explaining the sudden jump

There is plenty of pent-up demand for homes at the present time; many buyers have put off buying due to Brexit uncertainty.

There is every indication that prices could rise swiftly once the uncertainty ends.

However, that uncertainty remains in place and so the sudden uplift revealed by Halifax is at best puzzling.

That is a further persuasive reason not to base your property buying decisions on its February data.

5. The general picture suggests a period of weak growth or price falls.

A year of massive growth is not what the BBC revealed when, at the start of the year, it considered likely house price rises in 2019.

It revealed that most expert sources were predicting modest average growth of 0-3% nationally:

Hometrack: 3% rise

Rightmove: no change

Capital Economics: 1% rise

RICS: no change

Halifax: 2-4% depending on a benign Brexit.

Other media outlets reported anticipated falls in London prices.

Projected growth for London house prices in 2019:

Screenshot 2019-03-13 at 17.04.39.png

The over-riding conclusion is that it would be extremely unwise, bordering on perverse, to expect stellar growth in house prices based on Halifax’s House Price Index for February.

However, that is not to say, it cannot happen.

Students of the “18 Year Property Cycle” can point to the fact that when house prices exit from the mid-cycle wobble (which could be construed as the last 2-3 years), there is a period of aggressive growth leading to a crash.

Could Halifax’s February data be signposting that period of explosive, out of control growth…leading to a crash in around 2025-27?

That is definitely a possibility.

However, it seems more likely that any period of explosive growth will begin next year or the year after.


The massive price jump in February could be a sign of things to come…prices increasing fast as the country exits the doldrums of Brexit.

However, the key point is that you should not rush out and take action based on just one month’s data from one data provider.

Make sure any apparent trend is at least 3 months in length before you even think about relying on it. 

The right approach is to buy as soon as you can safely afford to do so, without taking undue financial risks or paying too much attention to short term price fluctuations.

That is the correct formula for successful property ownership.

If you own a property for long enough, the value of your real estate asset will increase handsomely with time, regardless of short term ups and downs in prices.

Enjoyed this blog? Please share it with friends by clicking on the LinkedIn, Twitter, Facebook or Instagram icon on this page. 

What is your take on the future for house prices – up or down, and why?  Please leave your observations or comments below.

You may also find the following blogs useful:

Asking prices going down (Rightmove Nov 2018 – asking prices continue to fall)
The Brexit property boom (Why Brexit could cause a property mini boom)
Asking prices continue to fall (Rightmove Dec 2018 – asking prices still falling)
London property pain continues (London house prices set to fall in 2019)

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Dalton Barrett
Rebel Property Coach

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