Halifax: Prices up 7.5pc despite monthly decline
Throughout the year activity also picked up with transactions in 2013 likely to have exceeded the one million mark for the first time since 2007.
Home sales rose for the seventh successive month in November to 96,980; 24% higher than in November 2012.
Martin Ellis, housing economist at the Halifax said: “House prices in the final three months of 2013 were 1.9% higher than in the previous three months.
“This was within the narrow range of 1.8-2.1% for this measure recorded in each of the preceding six months.
“The annual rate of price increase fell slightly compared with last month with prices in the three months to December 7.5% higher than in the same three months last year.”
Jeremy Duncombe, director of Legal & General Mortgage Club said the price rises were welcome but warned that pitfalls could lie ahead.
He said: “Last year we saw house price rises become the norm with a 7.5% rise overall in 2013 according to Halifax.
“Although for homeowners house price rises can be welcome, it could also make it much harder for first time buyers to get a foot on the ladder by affecting affordability.
“The simple fact is we need to build more houses. Otherwise, long term stability may be called into question and fears of an overheating market particularly in London and the South East will continue to grow.”
But Ellis said that mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence over the coming months.
He said: “This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand.
“Nonetheless, continuing pressures on household finances, as earnings again fail to keep pace with consumer price inflation, are expected to constrain demand.
“The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home.