House price boost
House prices have recorded their strongest quarterly rise in three years in a further sign that efforts to kick-start the market are working, according to figures from mortgage lender Halifax.
House prices showed the first annual increase in more than two years, growing by 1.3%.
Prices rose by 1.9% in the past quarter, despite a 0.2% dip in January.
The Bank of England has previously attributed a rise in mortgage approvals to the government's Funding for Lending scheme.
'Rising mortgage approval numbers point to further increases in home sales in the coming months,' says Martin Ellis, Halifax chief economist. 'The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months. This is likely to have been a factor contributing to the pick-up in both home sales and prices.
However Ellis predicts flat prices for the year. 'Subdued economic growth and pressures on household finances are expected to constrain housing demand. Overall, we expect continuing broad stability in house prices nationally in 2013,' he says.
According to Halifax's latest index – based on its approved mortgages – the average price of a UK property was £162,932 in January.