The Halifax have reported a drop in house prices of 0.9% for February, which cancels out the rise of the same proportion that it reported for January. The lender said that prices were now 2.8% lower than twelve months ago with the typical UK home now costing £162,657.
Martin Ellis, housing economist at the Halifax, predicted a further “modest” fall of 2% over the rest of 2011: “Fewer properties have been coming onto the market in recent months. This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices.”
Conversely, earlier data released by Nationwide showed that house prices had risen by 0.3% in February - a positive that was backed up by the Land Registry’s figures for January, which showed a further rise of 0.2% on December. However, the general trend is one of a lukewarm market at the start of 2011.
Halifax to Cough Up £500m to Mortgage Customers
Meanwhile, the Halifax has offered to make voluntary payments worth £500m to 300,000 of its mortgage customers. This is after the bank admitted confusing customers about its right to charge them more for their standard variable mortgages. In the autumn of 2008 and early 2009, when the Bank of England was busy cutting the base rate of interest from 5% to 0.5%, the Halifax did not follow suit. Instead, on some of their mortgages, they raised the margin above the base rate, from 2% to 3% - thus increasing their profits.
This was queried by Ray Boulger of mortgage brokers John Charcol, who asked the question as to whether the bank had the right to do this under their terms and conditions. The answer was clearly not, as the bank have come to a deal with the Financial Services Authority (FSA) to pay out this compensation. Those affected, who are still with the Halifax, will have their mortgage accounts credited in April. Customers who have left will be offered a cheque. The bank has said that some customers will receive a flat-rate payment of £250.