UK house prices 'rise at fastest rate since 2010'

 
House for sale signs House prices are growing at their highest annual rate since June 2010

UK house prices have risen by 5.4% in the year to August, according to the Halifax's latest house price survey.

It is the highest annual rate since June 2010.

On the Halifax's measure, the average price of a house also went through the £170,000 mark for the first time in five years.

However, the figures are still well below the peak of the market in August 2007, when the average price was almost £200,000.

The Halifax said housing market activity was up thanks to an improving economy, low interest rates, and government-backed schemes such as Help to Buy.

Earlier this month the Nationwide said house prices in August were rising at an annual rate of 3.5%, slightly slower than in July.

The Nationwide compares prices in one month with the same month a year ago.

However, the Halifax compares a three-month period with the three-month period in the previous year.

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UK house prices

Year on year % change

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Martin Ellis, the Halifax's housing economist, said: "Overall, house prices are expected to rise gradually over the remainder of the year."

The Halifax believes below-inflation pay rises "are likely to act as a brake on the market".

Property bubble

The Halifax estimates the average price of a house or flat in the UK is now £170,231. The last time house prices were higher than £170,000 was in September 2008.

The number of mortgage approvals for house purchases - an indicator of completed house sales - rose by 10% between the first and second quarters of 2013.

In July alone there were 60,600 approvals, the first time the number has exceeded 60,000 since 2008.

The rise in prices and market activity, coupled with the Help to Buy scheme, which offers a government-backed loan of up to 20% of the price of the property, have increased fears that the country could be heading for another property bubble.

But last month Mark Carney, governor of the Bank of England, said he was "acutely aware" of the risks, and had a "toolkit" of measures he could employ to combat unrestrained mortgage lending.

Matthew Pointon, property economist at consultancy Capital Economics, said: "A short-term imbalance between housing demand and the number of homes on the market is driving price increases.

"But the rise in wholesale interest rates seen over the past few weeks may soon start to feed through to mortgage rates, dampening demand."

There are already signs that mortgage rates may have bottomed out, with some lenders increasing rates earlier this week.

 

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  • rate this
    +2

    Comment number 134.

    I have written correspondence with both the last two Governors showing the folly of inflating house price bubbles -all they did was made excuses.

    We don't want excuses. We want a real economic revival & one that is not crushed by astronomic & unaffordable house price levels.

    These prices CAUSE jobs to go overseas.

    The house price levels are stealing jobs from you & your children.

    CARNEY OUT!

  • rate this
    +19

    Comment number 133.

    It looks like the help to buy scheme is pushing up the market again which gives the perception that everyone is out buying houses with massive deposits but reality is most people are only buying an initial share of their home and pay rent on the remainder.We are a generation that now look to these loans because it seems the only way and that bubble looks set to burst

  • rate this
    +2

    Comment number 132.

    118.John_from_Hendon
    5 Minutes ago
    Why s ANYONE still supporting Carney?
    -
    Because if someone like you writting in caps and who clearly has two accounts given the 5 min gaps between posts are ranting and raving against him then I'm all for him. Even without that, I have A level, degree and a masters in economics and I agree with his stance.

  • rate this
    +3

    Comment number 131.

    Sounds like a fresh wave of spivving and ruination is on its way. The British disease. Speculating on each others houses trying to trouser unearned money? Houses are not actually any more valuable, just more expensive?

    This is what wrecked the economy the last time. Suggest that you do not doing it again

  • rate this
    +2

    Comment number 130.

    Anyone seen Channel 4's Utopia

    Am I the only one that thinks it would solve alot of issues

  • rate this
    +4

    Comment number 129.

    Not entirely sure owning your own house is the option for everyone. It's probably the balance between rent and mortgage which tips towards ownership. Given the high costs of maintaining property from some people's stories they are probably devaluing their 'investment' through lack of funding anyway.

  • Comment number 128.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +62

    Comment number 127.

    Good news for landlords, property speculators and estate agents.
    However for the majority of people who want to buy a house as a home and not as a form of income or a pension alternative, I can only see this as being bad news.

  • rate this
    +2

    Comment number 126.

    It was obvious that the Help to Buy scheme would fuel another housing bubble. The IMF had already reported in 2012 that the UK housing market was 30% overvalued.

    Is George Osborne trying to emulate Gordon Brown?

  • rate this
    +9

    Comment number 125.

    The patient keeps getting fed the credit drug - the crash when it does happen is going to be catastrophically MASSIVE.
    Fear not first time buyers, you'll be able to pick from a sea of re-possessed properties going for a song.....

  • rate this
    +4

    Comment number 124.

    Carney has shown that he has no understanding of the dynamics of the UK's economy.

    He has knows nothing, and has learnt nothing, about economics in the UK.

    He is completely unfit for his post.

    You cannot buy the next election fro your Tory buddies by crushing the UK through a massive housing bubble.

    Nice cartoon yesterday - Carney with a blindfold unable to see the housing bubble!

  • rate this
    +6

    Comment number 123.

    For a significant time our economy has been geared toward borrowing.

    There is no incentive to save.

  • rate this
    +1

    Comment number 122.

    117 tired...
    Immigration might not help but it's not the cause of the problem. The problem is a straightforward shortage of housing - 2 million or so and growing.

  • rate this
    +2

    Comment number 121.

    The only reason to celebrate house prices rising is because it boosts the financial institutions and governments income, boosts greedy landlords pension pots, if you are selling to leave this awful country or because of inheritance.

    Other than that house price rises do nothing for the majority of people other than to take more from their pockets.

  • rate this
    +1

    Comment number 120.

    "House prices rise fast"

    - or to put in another way -

    "Housing shortage reaches crisis"

    Under-supply is the only reason house prices are vastly beyond what ordinary people can afford.

  • rate this
    +3

    Comment number 119.

    At the end of the fabled Lawson boom prices slumped - making housing affordable again and hurting those who speculated rather than saved.

    Georgie has instead pumped £150bn into the property bubble to keep up prices and to protect those who speculated - ruining those who saved. Cheap money/gigantic state support of the banks keeps prices up

    Why? the Tories are now owned by banks & speculators

  • rate this
    -3

    Comment number 118.

    Why s ANYONE still supporting Carney?

    He has created this unsustainable DELIBERATELY housing bubble and he doesn't give a ffff, for the mass of the British people. He exists ONLY to give succour to the BANKERS.

    HE MUST BE FIRED. Or change his ways immediately.

    Even to a deaf blind hermit 5.4% is an insane rise given we have a dead economy and 'extraordinary' money!

    What a waste of a life!

  • rate this
    +7

    Comment number 117.

    My son lives and works in London his rent is massive but he cannot to buy. We have paid for his education, UNI and professional training costs otherwise we would helped him to put a deposit on a flat. I do feel for him and other young people today. The real reason for the housing shortage is massive immigration to this very small island and with another 50,000+ due in Jan.

  • rate this
    +9

    Comment number 116.

    We let in millions of immigrants but we do not build houses, schools or hospitals for them - so the poorest suffer most from the shortages. Price inflation simply reflects the desperate shortage of housing in Britain and the callous cynicism of Government to allow it to happen. The situation is the same in hospitals and schools. Any time soon the lights will go out. Short-termism rules UK?

  • rate this
    +1

    Comment number 115.

    @104. shovehalfpenny
    In that case, cool, hope he does well! However all other parents not paying the fees upfront need to think about it.

    And the engineering stuff, sure you can't find ALL of it at a local library, you need to find places to work to do practical stuff, but if you want to learn it really bad there is more than enough good resources and good people to help you do it for free. :)

 

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