House Prices Continue to Rise
The latest house price indices from the Halifax show that house prices continued to rise in November 2012. This was the tenth successive month that the Halifax has tabled an increase; prices were up 1.1% on the previous month, contributing to an annual rise of 7.7%. The average house price is now cited at £174,910. The lender says that a strong demand for housing with a lack of homes coming onto the market is driving house prices upwards. However, it did add that the rise would be kept in check by buyers’ constrained finances.
The quarterly figure, which represents a more accurate picture, showed that prices rose by 2.1% in the three months to the end of November, compared to the previous quarter. There was more good news from Martin Ellis, Halifax chief economist: “We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms.” Despite this fairly rosy snapshot of the UK housing market, it is still somewhat short of the last boom; according to the Halifax, the current average house price is 12% lower than the August 2007 peak.
In a move that could have been a reaction to recent fears of a new housing bubble, the Bank of England has deemed support for mortgage lending as “no longer necessary.” The Funding for Lending scheme, which allows banks and building societies to borrow cheaply from the Bank of England on the understanding that they loan that money on, is now being redirected to business lending only. The Halifax’s figures are similar to that of its rival Nationwide, which reported a 6.5% annual house price rise in November.
Sources: bbc.co.uk, Lloydsbankinggroup.com, nationwide.co.uk (image courtesy of telegraph.co.uk)