And we may see falls, says this writer.

One of the features of the modern era is the way that central banks have come to regard house prices as one of their main agents of monetary policy. Come rain or shine they must be pumped up. The crisis we have just been through is an example of this. It is simply extraordinary that the sort of recession/depression we have suffered and are still experiencing would be accompanied by this.

Overall, prices remain around £24,500 up on this time last year and £37,500 higher than two years ago. (Halifax)

I had long warned that this was the central bankers’ plan, which essentially involved singing along with West Ham fans.

I’m forever blowing bubbles,
Pretty bubbles in the air.
They fly so high,
Nearly reach the sky,
Then like my dreams,
They fade and die.

Of course, the issue of what is a bubble is rather complicated and we get lots of hype about mortgages being cheap (true) and affordable (which rather ignores the ever-higher debt burden that is required). In fact, my latter point is symbolised by this monthly figure.

Net borrowing of mortgage debt by individuals decreased slightly to £3.6bn in December, from £3.8bn in November. This is below the pre-pandemic average of £4.2bn in the 12 months up to February 2020. (Bank of England)

This has been a long-term game which I have been warning about since the Funding for Lending Scheme began back in the summer of 2012, as its role was to make the net mortgages numbers positive. This was pumped up in the pandemic by the cut in Bank Rate to 0.1%, the rise in QE bond purchases to £895bn and the additions to the Term Funding Scheme as the Bank of England put its shoulder to the mortgage wheel.

So, we have ended up with what they call wealth effects and a boost for the economy, which I point out is also inflation for prospective house buyers and especially first-time ones.

The Halifax

Its release this morning was a little more downbeat than the Nationwide.

“House price growth slowed somewhat at the start of the year, rising by just 0.3% in January, the smallest monthly increase since June 2021. This followed four consecutive months of gains above 1%, and with annual growth remaining at 9.7%, the average UK house price was little changed, edging up slightly to a new record high of £276,759.”