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UK house prices rising steadily, says the Halifax

For Sale sign
Image caption House prices have not returned to levels seen during the housing boom

The UK housing market is continuing to see prices and activity rise, according to the latest survey from the Halifax.

Prices in the three months to July rose by 2.1% compared with the previous three months, the lender said, with prices up 0.9% in July itself.

The Halifax said prices in the three months to July were up 4.6% from a year earlier, the highest annual rate since August 2010.

Sales also picked up, with transactions up 6% in the first half of the year.

The lender said that the average home was valued at £169,624.

Rises ahead?

The figures from the Halifax paint a similar picture to the Nationwide, which last week reported a "robust" increase in property prices.

The building society also recorded the biggest year-on-year rise in nearly three years - although it pointed out that this was partially the result of prices dropping a year ago.

The year-on-year comparison is calculated slightly differently by the two lenders. The Halifax compares the previous three months with the same three months a year earlier to give a smoother comparison, rather than a direct comparison of the equivalent months as calculated by the Nationwide.

Figures from both lenders do not suggest a return to a housing boom. However, Halifax's housing economist, Martin Ellis, said that signs of improvement in the economy had boosted consumer confidence.

Government schemes aimed at kick-starting the market had also had an effect, he said. Yet a lack of wage growth would put the brakes on interest among buyers.

"House prices are expected to continue to rise gradually through this year, with only modest economic growth and still-falling real earnings constraining housing demand and activity," he said.

'Lack of choice'

The Halifax said that the number of completed sales was up on last year, but was not matched by more properties coming onto the market.

Analysts suggest that the housing market will see a "long, slow recovery".

"It is still too early to describe the housing market as being in rude health, however, as there is a worrying lack of stock, which is the main driver behind the latest rise in house prices," said Mark Harris, chief executive of mortgage broker SPF Private Clients.

"London remains a unique case with many agents reviewing their forecasts for prime central London in particular. Overseas buyers are fuelling demand, with London increasingly seen as a safe haven for their money, and this shows no signs of abating. In other parts of the country, the picture is very different."

Alexander Gosling, director of online estate agent Housesimple.co.uk, said: "This feels like an entirely different property market from pre-2008, when prices were rising at a perilously unsustainable rate. This appears on the surface like a more controlled recovery of a market that has had a long climb back to normality."

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Rising prices and a lack of choice would not be welcomed by first-time buyers.

One lobby group said that it was concerned that buyers were facing the "burden" of stamp duty.

Sales of residential properties are free of stamp duty up to the value of £125,000, but buyers pay 1% tax on properties sold for between £125,000 and £250,000. This rises to a rate of 3% on homes sold for more than £250,000, up to £500,000, with higher levels for more expensive homes.

The TaxPayers' Alliance said that rising prices would add to the bill for buyers, describing stamp duty as "punitive".

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