House prices see ninth monthly increase

House prices in the three months to October were 1.6% higher than in the previous quarter (May-July), according to the latest house price data from Halifax.

Related topics:  Mortgages
Amy Loddington
6th December 2013
Mortgages

This was the smallest increase since May (also 1.6%) and has slowed compared with quarterly rises of 2.0-2.1% in each of the previous four months.

Prices in the three months to October were 6.9% higher than in the same three months a year earlier. This continued the upward trend in the annual rate.

House prices increased by 0.7% in October. This was the ninth consecutive monthly increase. Nonetheless, the average price in October remained significantly below the August 2007 peak.

Activity on an upward trend. Home sales during the July to September quarter were 21% higher than in the same three months last year.  The number of mortgage approvals for house purchases – a leading indicator of completed house sales – in the three months to September was 11% higher than in the previous quarter. Activity, however, remains significantly below the levels recorded in 2006 and 2007 with sales in 2013 Quarter 3 still 36% lower than in 2006 Quarter 3.
 

The low level of mortgage payments in relation to income is helping to boost housing demand. Typical mortgage payments for a new borrower - both first-time buyers and homemovers – at the long-term average loan to value ratio, accounted for 27% of disposable earnings in 2013 Quarter 3; its lowest proportion since 1999 Quarter 2 and comfortably below the average of 36% over the past 30 years.

Commenting, Martin Ellis, housing economist, said:

"House prices in the three months to October were 1.6% higher than in the previous three months; this rate is below the increases of 2.0-2.1% recorded in each of the previous four months. Despite the slowdown in the quarterly rate, the annual rate continued to rise with prices in the three months to October 6.9% higher than in the same three months last year.

"Demand has increased this year, putting upward pressure on house prices and increasing levels of activity. Low interest rates, and higher consumer confidence supported by the increasing evidence that a sustainable economic recovery may now be underway, are helping to increase housing demand. Schemes, such as Funding for Lending and Help to Buy, also appear to have boosted demand.

"Despite increases in the past year both house prices and sales remain below the levels reached at the height of the last housing market cycle in 2006/2007. Sentiment towards selling has also improved in recent months in response to the pick-up in the market, which should help to increase the availability of properties on the market over the coming months."

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.