Housing market sees summer boost: Halifax

House prices in the latest three months (May-July 2014) were 3.6% higher than in the preceding three months (February-April 2014), according to the latest house price index from Halifax.

Related topics:  Mortgages
Amy Loddington
6th August 2014
Mortgages

Prices in the three months to July were 10.2% higher than in the same three months a year earlier. This continued the upward trend in the annual rate.  After recording a decline in June, monthly house prices grew by 1.4% in July. Monthly movements, however, can be volatile and the quarter on quarter change is a more reliable indicator of the underlying trend. Since last December there have been four monthly price increases and four price falls.

Although home sales have edged down by 6% since a recent peak in February, they are close to 103,000. Home sales during the April to June quarter were 21% higher than in the
same three months last year.

New buyer enquires continue to ease, a trend that started in November last year. On the other hand, the latest Halifax Housing Market Confidence Tracker indicates that sentiment towards selling is growing. Over half (57%) of those surveyed believe the next 12 months will be a good time to sell, compared to only 32% who feel it will be a bad time. This is the highest score of this measure since the survey’s inception in April 2011.

Commenting, Stephen Noakes, Mortgages Director, said:

"House prices in the three months to July were 3.6% higher than in the three months to April. Annually prices were 10.2% higher in the three months to July than in the same three months last year.

"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, Mortgage Club and Housing,  Legal & General Network, commented:

“Despite a slight dip last month, the rapid pace of house price growth still hasn’t started to slow. 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. Our latest Mortgage Mood survey shows that 68% of homeowners think there is likely to be a rate rise in the next year. With this in mind, borrowers need a real strategy to cope with the impact that rate rises will have on their finances. 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.”

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