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News: UK house prices continue to grow, say Halifax

Thu, 09 Apr 15


UK house prices continued to grow in the first quarter of 2015, according to the Halifax, with prices 2.6 per cent higher than the final three months of 2014.

The lender’s latest house price index shows that prices in March 2015 edged up 0.4 per cent, offsetting February’s 0.4 per cent fall. The average house price is now £192,970, with values in Q1 2015 8.1 per cent above Q1 2014.

This annual growth is down from the 8.5 per cent recorded in January 2015 and far below the 10.2 per cent recorded in July 2014. Quarterly growth is now at a similar rate to September 2014 (2.7 per cent) prior to a marked slowdown in the last three months of 2014.

With price growth enjoying a more relaxed pace this year, demand remains strong: home sales rose for the second successive month in February with a 2.5 per cent increase compared with January. Mortgage approvals also continue to increase. The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – rose for the third consecutive month in February. As a result, approvals during the three months to February were 2 per cent higher than in the preceding three months. This recent improvement follows five successive monthly falls in approvals between July and November 2014.

"The recent return to real earnings growth for the first time in several years, very low mortgage rates and last December’s stamp duty changes are supporting housing demand," comments housing economist Martin Ellis. "The rising level of house prices in relation to earnings should, however, curb house price growth and activity. The annual rate of house price growth, which has continued to ease in the first quarter of 2015, is forecast to end the year at 3-5 per cent."

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB),  adds: "The recent recovery of wage growth has also helped to make home-ownership a more affordable prospect as consumers’ earnings begin to catch up.

"However, there still remains a dangerous imbalance in the supply of new homes that risks driving up house prices in the long-term. In the run-up to the general election, clear policies on housing and the creation of new homes are needed to prevent the current shortage from worsening."

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