House prices in the last three months of 2013 (June-August) were 2.1% higher than in the preceding three months (March-May), according to the latest House Price Index from the Halifax. This was the same rate of increase that occurred in both June and July.
The Index also found that:
- Prices in the three months to August were 5.4% higher than in the same three months a year earlier. This was higher than July's 4.6% increase and is the highest annual rate since June 2010 (6.3%). The annual rate has picked up from 1.1% in March 2013.
- House prices rose by 0.4% in August. This was the seventh consecutive monthly increase.
- Activity has risen as well. The number of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 4% between June and July, to 60,600; the first time that approvals have exceeded 60,000 since early 2008.
- The relatively low level of mortgage payments in relation to income is supporting housing demand. Typical mortgage payments for a new borrower - both first-time buyers and homemovers – at the long-term average loan to value ratio, accounted for 27% of disposable earnings in 2013 Quarter 2; its lowest proportion since 1999 Quarter 2 and comfortably below the average of 36% over the past 30 years.
- More properties are coming on to the market. Whilst demand has increased more quickly than supply, surveyors have reported a rise in the number of homeowners providing instructions in each of the last six months, according to RICS. Further improvements in the availability of properties for sales could help to bring demand and supply into better balance, constraining the upward pressure on prices.
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