Average house prices jumped 10.2 per cent in the 12 months to July, with house prices in the three months to July rising by 3.6 per cent compared to the previous three months, Halifax’s monthly house price index has revealed.
After recording a monthly decline in June, monthly house prices grew by 1.4 per cent in July, but Halifax warned monthly movements can be volatile, noting that since last December there have been four monthly price increases and four price falls.
Although home sales have edged down by 6 per cent since a recent peak in February, they are close to 103,000. Home sales during the April to June quarter were 21 per cent higher than in the same three months last year.
New buyer enquires continue to ease, a trend that started in November last year, however the latest Halifax housing market confidence tracker indicated that sentiment towards selling is growing.
Around 57 per cent of those surveyed believed the next 12 months will be a good time to sell, compared to only 32 per cent who felt it would be a bad time.
Stephen Noakes, mortgages director for the Halifax, said: “While supply remains low, housing demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates.
“However, earnings growth is still lagging behind consumer price inflation.”
Stephen Smith, director of the mortgage club and housing for Legal and General Network, commented that despite a slight dip last month, the rapid pace of house price growth still has not started to slow.
He said: “Whilst price rises may excite some homeowners, we need to see the pace of this ease off to ensure a sustainable and healthy recovery. The challenge for the government is to ensure that any action taken to cool down the market in London does not kill off the recovery in other regions.
“As the wider UK economy starts to bounce back, speculation about when interest rates will rise has intensified.
“Planning for a hike in mortgage repayments or talking to a broker now to lock into the best deal possible before product rates rise, can help to ease the shock that any rate increases will bring.”
