The latest house price figures make interesting reading, pointing to a sharp rise in average house prices during 2013, despite a surprising fall in December.
According to the Halifax, the UK’s largest mortgage lender, house prices rose by 7.5% during 2013, although they fell back by 0.6% in December.
The average home is now worth £173,467.
House price surveys
The annual increase is broadly in line with the figure of 8.40% published by the Nationwide last week. However, the Nationwide’s figures showed an increase in prices of 1.40% in December, compared to the drop revealed by the Halifax.
Despite the latest Land Registry figures, generally thought to be the most comprehensive survey, showing a more modest annual rise of 3.20% in the 12 months to November, the large increase reported by the Halifax will be seen by some as further evidence, that the property market is entering a another ‘bubble’.
The prices rises are expected to continue as we head into 2014, Martin Ellis, Housing Economist at the Halifax, said: “Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence over the coming months. This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand.”
However, increases are not expected, according to the Halifax, to continue unchecked. Martin Ellis again: “Nonetheless, continuing pressures on household finances, as earnings again fail to keep pace with consumer price inflation, are expected to constrain demand. The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home. This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply. Indeed, our consumer confidence research shows that there has been a significant improvement in sentiment towards selling in recent months. These factors should help to curb the upward pressure on prices.”