House prices pick up in August

The latest Halifax house price index reported annual growth rose from 3.3 per cent in July to 3.7 per cent in August, while prices remained steady on a monthly basis with growth of 0.1 per cent.

Russell Galley, managing director at Halifax, said prices in the three months to August were also 1.9 per cent higher than the previous quarter, with the average house price now at £229,958.

Mr Galley said that while the pace of employment growth has recently slowed, a low unemployment rate and a gradual pickup in wage growth helped to support household finances.

He said: "This has been accompanied by interest rates still remaining at a historically low rate and a stable, yet constrained, supply of new homes onto the market further supporting house prices."

In a world that made sense, more people would talk about the housing crisis and the can being kicked down the road, particularly in the face of Brexit jitters.Ewen Bunting

Mike Scott, chief property analyst at Yopa, said the latest figures confirm a slight upturn in the UK housing market - while prices only increased by 0.1 per cent in August, this means the previous month's increase of 1.2 per cent was not a one-off blip in the data.

He said: "The lender is now reporting that prices have increased by 3.7 per cent over the past 12 months, which is the highest annual rate of growth for nearly a year - it now seems clear that the slowdown in the spring, with a reported 3.1 per cent drop for the month of April, has not been sustained and the market returned to growth over the late spring and summer."

Ewen Bunting, head of sales at estate agency James Pendleton, said robust annual growth is a sure sign the housing market’s "iron lung" of low supply is at play.

He said: "The number of homes for sale just can not muster the strength to get off the pavement and into the lobby, let alone the lifts - it does not matter that affordability for most is pushing the limits of common sense, when borrowing is dirt cheap, people still need to move and are still climbing over each other to do so in some instances.

"In a world that made sense, more people would talk about the housing crisis and the can being kicked down the road, particularly in the face of Brexit jitters."

Mr Bunting said there was a spasm in the market around the time of the referendum but there has been a return to a reluctance to transact as the Brexit leave date gets closer.

He said: "With so much cheap lending and vote-winning schemes making the dream of home ownership a reality, it is almost too dangerous for politicians to take the patient off the machine and they know it."

rachel.addison@ft.com