House prices rose by 0.9% in July, a sixth successive monthly rise which brought the annual rate of growth to its highest level in three years, according to figures from lender Halifax.
The bank said demand for homes was being boosted by signs of improvement in the economy and government schemes to kick-start the market. Its report is in line with those from other players in the propertymarket, which have shown prices gathering momentum in the first half of 2013 and led several commentators to adjust their forecasts for the year upwards.
Halifax’s latest monthly snapshot of the housing market showed the average price of a UK home reached £169,624 during the month, and that prices were up by 4.6% year-on-year – the highest rate of increase since August 2010.
To work out the annual rate of house price inflation Halifax does not do a straight comparison of monthly figures, but compares the quarterly average of each year. When the monthly figures are compared the annual rate of growth is 5.7%
Three-month growth figures, which offer a better picture of the market than single monthly figures, showed a 2.1% rise – the same as recorded in June.
Figures from HM Revenue & Customs show that in the first six months of 2013 the number of home sales was up by 6% on 2012 at 495,000. Figures for the number of mortgages approved suggest that momentum has continued, with the number rising by 6% between the first and second quarter of the year.
Halifax’s housing economist, Martin Ellis, said: “Greater confidence is likely to have underpinned the increase in housing demand. Official schemes, such as Funding for Lending and Help to Buy, may also be raising demand.”
However, he added: “House prices are expected to continue to rise gradually through this year with only modest economic growth and still falling real earnings constraining housing demand and activity.”
The Funding for Lending scheme, launched in August 2012 to encourage banks and building societies to offer more loans to businesses and households, has been credited with making mortgages more readily available and affordable to homebuyers and remortgagors, and seems to be offering support to the housing market.
Recently, the Council of Mortgage Lenders reported that the number of first-time buyers reached a six-year high in May, and on Monday there were even signs of a return to sub-prime lending.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The outlook for the housing market continues to improve as increased mortgage availability, better rates and more choice at higher loan-to-values combine to make buyers more confident about their ability to get funding.
‘Sixth consecutive monthly rise’ for house prices | Money | theguardian.com.