4th April 2014
The UK’s property market is continuing to accelerate rapidly as prices are up by almost 9% in the past year according to the latest figures from Halifax.
The lender’s numbers show that in the three months to March prices were 8.7% up on the same period in 2013.
In addition, house prices during the first three months of this year were 2.3% higher than in the final quarter of 2013 while home sales increased for the tenth successive month in February to 108,940; 32% higher than in February 2013.
During the month there were 70,309 mortgage approvals for house purchases, 8% lower than in January. But compared to a year earlier approvals were 34% higher according to research from the Bank of England.
However the figures from Halifax also reveal that prices actually fell back by 1.1% on a monthly basis during March. The drop marks the third monthly decline in the past fifteen months; in contrast to the previous fifteen months when there were eight monthly price falls.
Lack of supply coming on to the market is continuing to add upward pressure on prices. The number of homeowners putting their property up for sale has continued to decline since the end of 2013 and while new buyer enquiries has also fallen since the start of the year, the imbalance between housing supply and demand remains. Latest house-building figures show signs of improvement with the number of housing starts in England in 2013 rising by 24% to 98,610 from a year earlier. However, the numbers of homes completed fell marginally by 2% to 87,000 during the same period.
Commenting on the latest figures Stephen Noakes, mortgages director, at Halifax says: “Housing demand continues to be supported by an improving economic outlook, growth in employment, rising consumer confidence and low interest rates.
“The recent strengthening in house price 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 and easing pressure on prices.”
Howard Archer, chief UK and European economist at IHS Insight, who forecasts that house prices will increase by around 8% across the nation in 2014, adds: “ While the softer house price data for March reported by both the Halifax and the Nationwide, and the slowdown in mortgage approvals reported by the Bank of England in February, may slightly ease concerns of a house price bubble developing outside of London, where there is one already, it remains a very real risk and something that policymakers need to closely monitor and be fully prepared to react to.
“ Survey evidence still points to appreciable buyer interest with much improved consumer confidence, rising employment, very low interest rates and the Help to Buy initiatives all supportive. Consequently, house prices look set to see further robust increases over the coming months – especially as a shortage of available properties is exerting further upward pressure on prices in a growing number of locations.”