House prices in the UK have gone up by 1.6% according to a report released by Halifax. This means that the yearly increase has now risen to 8.5%.
Prices went up by 0.6% in March after falling by 0.4% in February. After this latest change, the average house price in the UK is now £196,412.
The Halifax housing economist, Martin Ellis, stated:
“Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates,”
This high demand coupled with the relatively low supply of properties on sale in the UK means that prices are rising regularly.
“This combination has kept house price inflation steady in recent months with prices increasing by 2.2% to 2.6% on a quarterly basis and at an annual rate of 8% to 9%,” he said.
Whilst we have seen some fluctuation in prices on a monthly basis, these figures from Halifax are supported by those of Nationwide.
This most recent set of figures showed that house prices had risen more in April than in any other month since summer last year.
Halifax also started monitoring consumer confidence back in 2011, when they started carrying out regular surveys to gauge how many people thought that selling their home was a good idea. They now report that consumer confidence has reached its highest point since then.
The result of the general election may also have had a hand in the rise in confidence - shares in Foxtons estate agents rose by 13% on the day that the results were confirmed.
Howard Archer, chief economist at IHS Global Insight, stated:
“We maintain the view that housing market activity has bottomed out and will pick up gradually over the coming months,”
“We expect support for housing market activity to come from the recent stamp duty reform, very low mortgage rates, elevated consumer confidence, a pick-up in earnings growth and rising employment.”
However he did state that this will be restricted slightly by the ratio of household earnings to house prices and also the tighter checks that are now in place on borrowers by the banks. The fact that interest rates will eventually start rising will also be a limiting factor.
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