House prices up 1.1pc in January
House prices in the three months November 2013-January 2014 were 1.9% higher than in the preceding three months (August 2013-October 2013). This is within the range of 1.8 – 2.1% recorded for this measure throughout the preceding eight months to June 2013.
The Halifax said activity is on an upward trend with housing transactions in 2013 exceeding one million for the first time since 2007.
Commenting, Martin Ellis, housing economist at Halifax, said: “With the supply of properties being slow to respond to more buoyant market conditions, stronger demand has resulted in continued upward pressure on house prices.
“Demand has increased against a background of low interest rates and higher consumer confidence underpinned by signs that the economy is recovering and unemployment falling faster than expected. Official schemes, such as Help to Buy, also appear to have boosted housing demand.
“However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices.”
Jeremy Duncombe, director, Legal & General Mortgage Club, agreed: “In the South east and London the market is being boosted by several factors such as constricted supply and foreign buyers, thus pushing prices up. However in the North, prices have stayed at very similar levels over the past five years.
“It is encouraging to see that consumer confidence it starting to increase as this will enable the market to recover in the long term. However, despite recent positivity it is still worth remembering that until transaction levels increase to where they were in 2007 the market will still be in the recovery phase and we are well below that level currently.”