Lack of stock propels house prices higher
HOUSE prices in Britain experienced their first quarterly rise in two years in the three months to September, which saw the value of a UK home rise 2.8 per cent over the period, Halifax said yesterday in its monthly survey, citing increased demand and a shortage of properties for sale.
Data from the mortgage lender showed that house prices rose 1.6 per cent last month – twice as fast as expected – trimming the year-on-year fall to 7.4 per cent in the three months to September. So far this year, house prices have risen 1.7 per cent and are 5.9 per cent higher than their April trough. The average price of a UK home now stands at £166,533.
The better-than-expected Halifax data comes after Nationwide reporting last week that house prices rose 0.8 per cent in September compared to the previous month.
Martin Ellis, housing economist at Nationwide, said: “The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. The marked improvement in affordability due to the reduction in both property prices and interest rates since mid 2007 has been a key factor in stimulating higher demand.”
But IHS Global Insight’s Howard Archer said: “The 5.9 per cent rise in average house prices since April means that affordability pressures are now moving back up at a time when still weak economic activity, sharply rising unemployment and low wage growth is negative for the housing market”.
The Halifax data showed the ratio of house prices to earnings rose back up to 4.48 in September from 4.25 in April.