Annual house prices have risen 2.8 per cent over the last three months, reaching their highest level since August 2014, according to the Halifax.
The latest index found that prices in the three months to October were also 9.7 per cent higher than the same period last year.
As well as a 4.4 per cent increase in the number of UK house sales taking place between August and October, the index showed that the UK is optimistic about house prices.
House prices between September and October rose by 1.1 per cent and 68 per cent of Britons expect the average property price to increase in the next year.
Martin Ellis, Halifax’s housing economist, said that improving economic conditions and household finances, together with sustained low mortgage rates, have boosted housing demand during this year.
“Strengthening demand is filtering through in to higher sales levels although the ongoing shortage of supply is acting as a significant constraint on activity.
“The imbalance between supply and demand is likely to persist over the coming months, maintaining upward pressure on house prices,” he added.
Jeremy Leaf, former RICS chairman and now a north London estate agent, said that the national average conceals significant regional differences, adding that this historic snapshot which only records the actions of Halifax’s own customers, also underlines its limitations.
“That said, these figures are worrying, as they suggest a continuing upwards trend which risks marginalising first-time buyers even further and is therefore not good for the health of the market.
“There is not enough balance in the housing market and there are still significant barriers to entry, despite lower mortgage rates.”
He added that if prices continue their upwards trend, it does not bode well for those trying to get themselves into a new home early in the new year.
lucinda.borrell@ft.com
