House Prices Keep Rising
According to the Halifax index, house prices rose 0.5% in February and 1.9% over both that last quarter and year taking the average price to £163,600.
It’s the third consecutive monthly rise and the largest annual increase since September 2010 when there was a 2.6% jump from the previous year.
Halifax housing economist Martin Ellis said,
“This was the third successive increase in this measure of the underlying trend. Prices were also 1.9% higher than in the same period a year ago.
“House sales also continue on a modest upward trend. This increase in both house prices and activity in recent months is consistent with evidence of some improvement in market conditions. The more than half a million increase in the number of people in employment over the past year is likely to have been a factor supporting housing demand.
“We expect to see a national increase in house prices over the course of 2013. Weak income growth and continuing below-trend economic growth, however, are likely to remain significant constraints on housing demand.”
The Nationwide Building Society released their house price index last week which showed a 0.2% rise in house prices in February taking the average price to £162,245.
The biggest difference between the two indices is the annual price change, with the Nationwide showing no rise over the year while Halifax has a 1.9% increase.
It was also revealed recently by the British Bankers Association (BBA) that mortgage approvals dropped 14% in January compared to the same month a year previous.
House prices have felt the boost from rising employment rates and the Funding for Lending Scheme which has help increase mortgage lending.
The Funding for Lending Scheme was criticised recently because it was revealed that banks weren’t lending as much as was hoped, however it was primarily businesses which were impacted.
The housing market is expected to continue it’s recovery throughout the year but at a slow rate as the economy and high inflation hold it back slightly.