House prices up 1.1 per cent as demand rises
House prices up 1.1 per cent as demand rises
Wednesday 5th August 2009
House prices have risen by 1.1 per cent due to a rise in demand but low supply levels, according to the Halifax.The house price index out today showed a second increase in the last three months, with the average house price now at £159,623.
Halifax said the prices in the three months to July compared to the previous three months, a better sign of sustained market improvement, were 0.8 per cent higher, the first rise on a quarterly basis since October 2007.
Annually the Halifax figures showed the true effects of the housing market downturn, with prices down 12.1 per cent year on year. However, affordability also improved, with mortgage approvals increasing according to the Bank of England.
Martin Ellis, housing economist at the Halifax, said: "So far this year, house prices have fallen by less than one per cent.
"Demand for homes has risen, albeit from a very low base, since the start of the year, driven by improvements in affordability and low interest rates. Higher demand has combined with the low levels of property available for sale to boost sales activity from exceptionally low levels and support prices over the past few months."
The Royal Institution of Chartered Surveyors (Rics) said the Halifax index was "hardly surprising", but warned the housing market was still in a "fairly depressed state".
"Whilst this is the second rise in three months, these figures should still be treated with caution, any 'rises' are indications the market may be bottoming out - not that prices are going to shoot back up. Nevertheless, there are indications that the market is stabilising," Keshav Thukaram, managing director of Smartlandlord.co.uk, warned.
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