House prices are continuing their sharp rise according to the latest figures which suggest that between December 2013 and February this year they were 2.1 per cent higher than in the previous three months and 7.9 per cent higher than the same period last year.
The latest report from Halifax shows that house prices increased by 2.4 per cent in February, the eleventh monthly increase in the past 12 months, although the average price remains 10 per cent below the peak of August 2007.
The number of mortgage approvals for house purchases was 42 per cent higher than in January last year according to figures released by the Bank of England.
Stephen Noakes, Mortgages Director at Halifax, said: "Several factors appear to have boosted demand, such as the improved economic outlook, unemployment falling faster than expected, improvements in consumer confidence and low interest rates.
"However, 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 housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms."
Nicholas Ayre, managing director of homebuying agency Home Fusion, said: "Prices continue to rise, mainly owing to a lack of stock coming to market, but the average value remains 10 per cent below the August 2007 peak. The question is what does this mean for Mark Carney? Does he leave things as they are or seek to put some limitations on schemes such as Help to Buy in order to stop prices running away with themselves?
"The housing market is off the ventilator and is breathing unassisted but it still needs oxygen. The market is not functioning normally because interest rates have had to remain at 0.5 per cent for five years. It is clear that this has been a long recovery and it is not over yet. When interest rates do start to rise, it will cause a real problem for those heavily indebted homeowners, and will need to be handled with care."
The Halifax report follows reports last week from Nationwide which showed similar growth figures, putting the average house price in the UK at £177,846, and data from the Land Registry which suggested a slower rate of increase.
Dan Wilson Craw, spokesman for PricedOut which campaigns for lower cost housing commented: "We estimate that two thirds of private renters are unable to afford to buy a first home, and with house prices rising faster than wages, this situation is only going to get worse.
"Rising prices are attracting investors to the market who treat houses as financial playthings, rather than places to live, and this sends prices even higher. If the government really want to help young adults to buy, they need to end rising house prices by boosting supply and curbing speculation."Reuse content