The UK’s largest mortgage lender has reported a surge in house prices, spurred on by low interest rates and Government initiatives including the Funding for Lending and Help to Buy schemes.
According to the Halifax, house prices rose by 1.1% last month and are 7.70% higher than the same time last year, taking the value of the average home to £174,910.
This is the 10th month in a row house prices have risen, although they are still 12% off their 2007, peak according to the Halifax.
The figures are broadly in line with those issued previously by the Nationwide Building Society. Although the Land Registry, which monitors all housing transactions in the UK, suggest house prices are rising far more slowly.
Commenting on the figures, Martin Ellis, Housing Economist at the Halifax, said: “Stronger demand, combined with an insufficient increase in housing supply, has resulted in increases in house prices accompanying higher activity this year. Low interest rates, improvements in consumer confidence and official schemes, such as Funding for Lending and Help to Buy, all appear to have boosted demand.” (Source: Halifax)
Note of caution
Those people hoping that the pace of house prices increase will continue might be disappointed though.
Ellis went on to say: “Continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices.We are also seeing signs of a revival in house building, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms.” (Source: Halifax)
