House prices up 8.7% in last year, says Halifax
Friday 04 April 2014
Property prices lifted by 8.7% annually in March as low interest rates and blossoming consumer confidence helped boost housing market demand further, Halifax has reported.
On a month-on-month basis, prices dipped by 1.1%, although this is only the third monthly fall in the past 15 months, the report said.
The average UK house price now stands at £178,249, and the latest Halifax figures show house prices are continuing to rise at their strongest annual pace since 2007.
The 8.7% annual rate of increase recorded in March also shows that it has quickened its pace, compared with an annual rise of 7.9% recorded in February.
Stephen Noakes, mortgages director at Halifax, said: "Housing demand continues to be supported by an improving economic outlook, growth in employment, rising consumer confidence and low interest rates.
"The recent strengthening in house price is increasing the amount of equity that many homeowners have in their home.
"This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply and easing pressure on prices."
Halifax said that month-on-month changes to house prices can be quite "volatile" and quarterly changes tend to give a more reliable indicator of price trends in the housing market.
On a quarterly basis, house prices in the three months to March were 2.3% higher than they were in the final quarter of 2013, indicating house prices are on an upwards path.
Halifax also pointed to research indicating that a lack of supply of homes on the market relative to the levels of demand from home buyers is adding to the upward pressure on prices.
Experts expressed mixed views on whether the 1.1% monthly fall in property prices was a sign of something more significant happening in the market.
Howard Archer, chief UK and European economist for IHS Global Insight, said: "The dip in prices in March reported by the Halifax adds to some tentative signs that a little bit of froth may be coming off the housing market - although it is still robust."
Dr Archer also pointed out that the bad weather over the winter might also have had an impact on the figure.
Jonathan Harris, director of mortgage broker Anderson Harris, said the month-on-month fall in house prices "could well be just a blip".
He said a Bank of England report released yesterday into credit conditions showed that banks and building societies are preparing to do more lending in the coming months amid expectations of heightened demand.
Mr Harris said: "This suggests that any dip in lending now is not the beginning of a sustained decline. The lack of stock coming to the market is the real issue slowing everything down, with buyers competing at a frenzy of open houses and on sealed bids.
"New homes are being built but they simply can't be built quickly enough."
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