The latest figures from the Halifax, the UK’s largest mortgage lender, show house prices are on the rise.
According to the latest Halifax House Price Index, April saw a 1.1% rise in prices, taking the value of the average home to £166,094. The figures are significantly different than those released by the Nationwide, which indicated prices actually fell by 0.10% in April.
The Halifax also revealed house prices rose by 1.3% over the past quarter and by 2% during the last 12 months, again well above the Nationwide’s figure of 0.90%.
Commenting on the figures, Martin Ellis, Housing Economist at the Halifax, said: “House prices continue to pick up gradually. Prices in the three months to April 2013 were 1.3% higher than in the preceding three months, marking the fifth consecutive increase in house prices on this measure. The relatively low level of mortgage payments in relation to income continues to provide support for the market.”
Growth in house prices
According to the Halifax, house prices are now rising at the fastest annual rate since September 2010.
Housing experts believe the relatively low level of mortgage repayments, pushed down by low interest rates, are helping to prop up the housing market. According to the Halifax, mortgage repayments now account for 28% of disposable household income, compared to a peak of 48% in 2007 and a long term average of 36%.
However, the Halifax was quick to point out that despite price rises activity in the housing market is still subdued. Bank of England figures show the number of mortgages approved for house purchases, in the first three months of the year, were 1% down on the same period in 2012.
Martin Ellis again: “Market activity, however, remains subdued by historical standards with the number of mortgage approvals for house purchases, a leading indicator of completed house sales, easing slightly in the first quarter of 2013, according to the latest industry-wide figures.”
Looking forward to the rest of the year, Ellis said: “Weak income growth and continuing below-trend economic growth are likely to remain significant constraints on housing demand during the remainder of 2013.”