Halifax index shows strong growth
The lender believes low interest rates and low unemployment are continuing to drive the market.
The increase pushed the average cost of a property up to £123,451. Prices for the three months to the end of January are now 24.9% higher than they were during the same period the previous year. But Halifax said it still expects the market to slow, with prices rising by just 9% during 2003, compared with 26% the previous year.
Martin Ellis, Halifax chief economist, said: “The factors that drove the market up last year continue to be very much in place. Mortgage rates are at their lowest level since the late 1950s. Unemployment too has continued to fall despite the relatively sluggish pace of overall economic activity. However, the rising number of first-time buyers who are finding it more and more difficult to get on to the housing ladder will increasingly curb demand, causing house prices to rise more slowly.”
According to Inland Revenue figures, 1.59 million properties changed hands in England and Wales during 2002, the highest level since 1988.