House prices climb 5% in a year
House prices have risen by more than 5% in the past 12 months, according to the latest Halifax House Price Index.
'House prices in the three months to August were 2.1% higher than in the previous three months – unchanged from both June and July. Prices in the three months to August were 5.4% higher than in the same three months last year, the highest annual rate since June 2010,' says Martin Ellis, Halifax housing economist.
'Housing market activity is also on an upward trend with the number of mortgage approvals for house purchases – a leading indicator of completed house sales – 10% higher in the three months to July compared with the previous quarter after allowing for seasonal influences.
'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.'
The bank found that house prices rose by 0.4% in August: the seventh consecutive monthly increase; the number of mortgage approvals for house purchases increased by 4% between June and July, to 60,600; the first time that approvals have exceeded 60,000 since early 2008 and that typical mortgage payments for a new borrower - both first-time buyers and homemovers – at the long-term average loan to value ratio, accounted for 27% of disposable earnings in 2013 Quarter 2; its lowest proportion since 1999 Quarter 2 and comfortably below the average of 36% over the past 30 years.