Fastest house-price rise in three years fuels bubble fears
Thursday 03 October 2013
House prices rose at their fastest rate
for more than three years in the three months to September, the Halifax said
today, adding to fears the Government’s Help To Buy scheme could create a price
Halifax said prices rose nationally by 6.2% in the period against a year earlier. Month-on-month prices grew by 0.3% to their highest for five years.
Martin Ellis, Halifax housing economist said: “Housing demand has risen more quickly than supply in recent months, putting upward pressure on prices. 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. Official schemes, such as Funding For Lending and Help To Buy, also appear to have boosted housing demand.”
The Bank of England has repeatedly said that it will intervene if its sees real signs of a housing bubble starting, and has been given greater powers by the Treasury to do so.
Governor Mark Carney said last night that the Bank now had a “range of tools” it could use to ensure that the housing market “isn’t in a boom and then bust phase”.
Halifax suggested there was evidence the market was starting to unlock. Ellis 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 recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home, enabling more to put their property on the market for sale. Levels of housebuilding are also increasing, albeit from a very low base.”
Nationwide said last week that house prices rose at an annual rate of 5% in September.
Howard Archer, chief economist at Global Insight, said: “The relatively modest month-on-month rise in house prices reported by the Halifax in September may slightly ease concerns over an emerging house price bubble. Furthermore, house prices overall are still 14.5% below the peak level seen in August 2010.”
Archer also pointed out that limited supply continued to push up house prices more than the national average in London and the South-East.
- 1 King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
- 2 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Presidential optical illusion offers clues to how brain processes faces
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Ukip Jelly Babies cause uproar on Amazon
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...