UK house prices have found themselves on an upwards trajectory over recent months but growth could be slowing. The Halifax House Price Index for the three months to September showed that throughout the quarter values rose by two per cent - below the increases noted in June, July and August, albeit slightly.
This slowdown may mean that the foot which has so far been on the price accelerator is starting to ease off, but Martin Ellis, housing economist at Halifax, doesn't believe this is a bad thing. "Demand has increased against a background of low interest rates and higher consumer confidence underpinned by signs that the economy has begun a sustainable recovery," he said. "There are signs that supply is beginning to respond to the pick-up in demand, which if continued should help to constrain the upward pressure on prices."
The number of homeowners putting their property on market increased for the seventh consecutive month in August, while housing starts in England for the first six months of 2013 rose by 22 per cent year-on-year. However, values are still strengthening, despite the amount of equity owners have in their homes rising, allowing more to put their property up for sale. In the three months to September, prices were 6.2 per cent higher than in the same three months a year earlier. This is part of the upward trend in annual rate rises that set in during March 2013. Nevertheless, prices still remain 14 per cent below the August 2007 peak.
Rising activity has contributed to price gains and between June to August, home sales increased by eight per cent from the previous three months. Year-on-year, activity was 19 per cent higher. The number of mortgages advanced also increased, continuing the upward trend with a two per cent rise between July and August. This equates to 62,200 approvals for house purchase - the highest level since February 2008. In the three months to August, approvals increased eight per cent.
Understanding Average House Price Stats
- Monday 14 October 2013