House prices up more than 5% from a year ago

Rise represents the seventh consecutive monthly increase
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House prices between June and August were 2.1% higher than in the previous three months, according to the latest figures from Halifax.

The statistics also indicated that prices were also 5.4% higher than in the same three months a year ago. House prices rose by 0.4% in August, the seventh consecutive monthly increase.

Also up is the number of mortgage approvals for house purchases which increased by 4% between June and July, to 60,600 while surveyors have reported a rise in the number of homeowners providing instructions in each of the last six months.

Martin Ellis, housing economist for Halifax, said: "Economic improvement and low interest rates, supported by official schemes such as Funding for Lending and Help to Buy, appear to have boosted housing demand in recent months. Nonetheless,relatively modest economic growth and below inflation rises in earnings are likely to act as a brake on the market. Overall, house prices are expected to rise gradually over the remainder of the year."

Nicholas Ayre, managing director of homebuying agency Home Fusion, said: "Prices continue to rise but not as robustly as in the past few months, suggesting fears of a house price bubble are overstated. A bubble implies that people are buying anything at any price and they aren't. Buyers are being selective and sellers who are set on a certain price with little regard to what the market thinks the property is worth are struggling to sell.

"The Government may be keen for property prices to keep on rising but this will be a long, slow recovery. Much ground has been lost and transactions and lending levels are running at a fraction of what they were at the height of the housing boom. While it's useful to keep an eye on official numbers, ultimately it's about the buyer making their own call. Don't be too swayed by the fact that indices tell us prices are rising and end up panic buying in case you are priced out further. The buyer has to pay the mortgage and need to ensure they can afford it before taking the plunge."