House prices in the latest three months (March-May) were 1.5% higher than in the previous three months (December 2012-February 2013). This compared with the 1.3% rise recorded last month. House prices have been rising modestly on this three month-on-three month measure since December 2012 with increases of between 1% and 2% in each of the past five months.
Prices in the three months to May were 2.6% higher than in the same three months a year earlier. This was the biggest increase since September 2010 (2.6%).
Modest pick-up in home sales. Home sales in the three months from February to April were 2% higher than in the preceding three months (November 2012-January 2013) despite a 5% decline between March and April, according to the latest industry figures. (Source: HMRC, seasonally adjusted figures)
Improvement in market conditions since late 2012. The ratio of house sales to the stock of unsold properties has increased since last autumn. This evidence of strengthening in demand relative to supply helps to explain the modest rise in house prices over recent months. (Source: RICS)
Commenting, Martin Ellis, housing economist, said:
"House prices continue to pick up gradually. Prices in the three months to May 2013 were 1.5% higher than in the preceding three months. This was slightly higher than the 1.3% increase in the three month-on-three month measure in April.
"Market activity has also improved slightly in recent months although home sales remain low by historical standards.
"Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity."
Karelia Scott-Daniels, Managing Director of buying agents, Manse & Garret Property Search, comments:
"Just like the Nationwide last week, the Halifax says that prices rose by 0.4% in May.
"There's no doubt now that the property market as a whole is gaining momentum.
"The fact that prices over the past three months are 1.5% higher than the previous three months underlines how the market is strengthening.
"While the economy remains subdued, it at least appears to be improving.
"Consumers are still cautious but they are considerably less cautious than they were two to three years ago.
"Improved mortgage availability, lower loan rates and relaxed criteria have certainly contributed to the rise in house prices.
"As ever, it's important to remember that the overall figure does not reflect the fact that many local markets, especially in the North, are struggling.
"London and the South East are driving up the average figure and concealing areas of weakness, often those hit by high unemployment."
Jonathan Hopper, managing director, property search consultants Garrington, commented:
"A fourth consecutive month of house price growth, and a strong three-month growth figure, suggest that everything is rosy.
"In reality, there are two distinct markets out there - London and the South East, and the rest of the country.
"In the capital, house prices are rising at a rate of knots and in some boroughs there has been a return to sealed bids.
"In many areas across the UK, sellers are having to cut their prices to tempt buyers, and less desirable properties are languishing on the market for months.
"There's a danger that if the London market collapsed it could set off a panic across the rest of the country. But the strength of demand for property in the capital, underpinned by overseas buyers, makes this unlikely.
"What we need to see is steady, sustained growth, not a return to the days of a double digit property price frenzy, with house prices rising out of control and disconnecting from economic reality.
"We're definitely seeing more activity and a huge increase in committed buyers. People are no longer simply window shopping but are scouring the market with purpose."
