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

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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
    +9

    Comment number 454.

    When the bubble bursts again I sincerely hope that the buy-to-let landlords are not bailed out again. Apart from getting someone else to pay your mortgage for you being of somewhat dubious morality I believe that a few hundred thousand properties coming onto the market due to mortgage defaulting landlords would be good for the young folks trying to buy their first home.

  • rate this
    +1

    Comment number 453.

    @440. True but the whole sector has gone through dramatic turmoil over the past 15 years. Nearly 23,000 dairy farms alone going bust. There are plenty of 200-500 acre farms for sale and demand by both business groups & independent farmers is high.Hence the huge price hike. I live on open farmland but don't farm. I'm off to see all the A4's at NRM in Nov.

  • rate this
    +11

    Comment number 452.

    When will BBC stop the property-porn propaganda?

    Higher house prices help only the BTL brigade, the asset-rich, the banks and the estate agents.

    The government/BoE should allow house prices to correct to their average wage levels and stop subsidising the above!

    Tax the 2nd properties!
    Tax the BTL landlords!
    Tax the non-resident landlords!

  • rate this
    +2

    Comment number 451.

    The Conservative Party has received large donations from Britain's house-builders in the past. Why wouldn't you want to create a housing property 'boom' ahead of the next election that will benefit land owners, builders and the wealthy with money to invest in residential properties? Meanwhile the masses will 'revel' in their ability to borrow more money against their increased house value...

  • rate this
    +5

    Comment number 450.

    Think I bought at just the right time then. Agreed the price at the beginning of June. I think a lot of people like me have spent the past 5 years saving and now we finally have the deposit money prices are going to inevitably increase

  • rate this
    +5

    Comment number 449.

    To those who say this is a dangerous bubble, rest assured the whizz kids in the City can take out all the risk by hedging with mortgage-backed derivatives, so there's absolutely no danger to the economy if the housing bubble bursts. I mean...what could possibly go wrong??

  • rate this
    0

    Comment number 448.

    So house prices have shot up and the economy has moved into growth. Coincidence? I think not. Yet another false boom on the back of an unsustainable housing price blubble.

    And all the time Osbourne is claiming credit for having solved all our economic ills with austerity. What a pile of ...........!

  • rate this
    +5

    Comment number 447.

    Why is the media besotted and obsessed with house prices?

    Oh yes, of course, the UK economy depends on someone estimating that a house is worth a fortune, then lending some hapless clown 10x that sum on no security to obtain "interest" at punitive rates. Hooray for the capitalist model! We are all saved!

    Hang on, though, didn't something like this all go belly-up not long ago...?

  • rate this
    +3

    Comment number 446.

    .
    When the housing market goes tits up so will the banks and the economy!
    .

  • rate this
    +4

    Comment number 445.

    It'll end bad. Bubble stoked to win election. Tories using Labour tactics and this is for them not you. They'll take the houses back soon after they win.

  • rate this
    +1

    Comment number 444.

    Cameron & his bubble economics.
    Bombing Syria to aid Al Qaeda & printing money to help make housing affordable. Genius.

    Even those already on the ladder are worse off as the cost of the next house up the ladder is now even further away.

    £100k property rises to £105k
    £200k property rises to £210k

    Still risky to buy first home & much harder to move up ladder

    boom

  • Comment number 443.

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

  • rate this
    0

    Comment number 442.

    Great. At least the last grains of my delusional intentions to eventually buy a house have been blown away so I can dedicate my time and energy to hating the awful capitalist system we are unfortunately stuck with for the time being.

  • rate this
    +2

    Comment number 441.

    435.FauxGeordie
    Just now
    424 Supply & demand do NOT explain the housing bubble. There are over a million empty homes unused.

    Rubbish, those 1 million homes you talk of are not for sale and so do not factor into the supply and demand equation. If you look at Ireland they are demolishing new build estates as they now have an over supply and no sign of a housing boom there!

  • Comment number 440.

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

  • rate this
    +1

    Comment number 439.

    @417
    not saying no more in and no more out, but there should be a means test at least to see if people entering another country have the wealth to survive without the need of support from a country that has seen no contribution from the individuals. If I wanted to live in another country but was denied because I couldn't afford it, I would be disappointed but I would understand go away and save!

  • rate this
    +4

    Comment number 438.

    @405.I agree that 'excess' population is a fundamental problem.It stretches our housing stock, infrastructure, educational system and national resources. We have too many people and I don't mean any one group in particular. As to how we reduce it therein lays the problem. It's currently expanding more than 2X the European average. Some form of birthrate/population control is inevitable.

  • rate this
    -1

    Comment number 437.

    @403 hsfil
    I agree, it isn't fair. The young are bearing the brunt of their parents and grandparents failure. Unfortunately much this is an unavoidable consequence of decades of borrowing against a future that didn't exist and since the public don't like consequences they kick anyone that doesn't boot it down the generations. Don't like it either, but its the public that needs to change.

  • rate this
    +3

    Comment number 436.

    428.Tanglewood

    Those who already own houses that they wish to sell in order to move (whether for work/family reasons, upsizing or downsizing) will welcome the opportunity to get a higher price for existing property.
    ===
    If they up size the step will be bigger the higher house prices are. You only really gain if you sell and go live in a tent, or have a 2nd house.

  • rate this
    +1

    Comment number 435.

    424 Supply & demand do NOT explain the housing bubble. There are over a million empty homes unused. Cheap credit is keeping the prices up and where the market won't supply cheap credit the government steps it to pump up the bubble again.

    You will be left with the bill. You were in 2007/8 and you're going to get absolutely walloped again - its the only way Georgie can see to get re-elected

 

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