UK House Prices Rise at Fastest Annual Pace Since 2010

UK house prices last month rose at the fastest annual pace since 2010, and are likely to increase further in the remainder of the year, Halifax has said.

According to the mortgage lending unit of Lloyds Banking Group, British house prices in the three months to end-July were 4.6 percent higher than a year earlier, their fastest annual rate of growth since August 2010.

In July alone, home values rose by 0.9 percent on the month, gathering pace from the 0.6 percent increase in June and marking the sixth monthly rise in a row. According to Halifax’s latest snapshot of the UK housing market released today, the average price of a UK home reached £169,624 last month, up 5.7 percent year-on-year.

The latest values of Halifax’s House Price Index add up to a string of positive property data in the UK. Lenders, surveyors, estate agents and property websites have all been reporting a strong pick-up in property values.

Improved UK Housing Market Activity

In a further sign of improvement in the property sector, sales levels had gone up by six percent, as compared to the first seven months of 2012, Halifax said, adding that there were 495,000 property transactions in the January-July period of 2013.

The number of mortgage approvals for house purchases — a strong indicator of future house sales — had also risen six percent in the second quarter of 2013, compared to the previous three months, the mortgage lender noted in its report.

According to Halifax, improvements in the wider economy appear to have boosted consumer confidence which has underpinned increased demand for new homes. Martin Ellis, a housing economist at Halifax, also pointed at government initiatives as major market drivers.

He said in a statement today: “Official schemes, such as the Funding for Lending Scheme and the Help to Buy equity loan scheme, may also be raising demand.”
Halifax warned however that a lack of wage growth could cause demand for property to drop.