House prices in the latest three months were 2.1% higher than in the preceding three months (September 2013-November 2013, the Halifax has reported.
This is within the range of 1.8% – 2.2% recorded for this measure throughout the preceding nine months.
Prices in the three months to February were 7.9% higher than in the same three months a year earlier. This continued the upward trend in the annual rate.
House prices increased by 2.4% in February. This was the 11th monthly increase in the past 12 months. The average price is, however, still 10% below the August 2007 peak.
Stephen Noakes, Halifax’s mortgages director, said: “House prices in the three months to February were 2.1% higher than in the three months to November. The annual rate of increase rose again with prices in the three months to February 7.9% higher than in the same three months last year.
“Several factors appear to have boosted demand, such as the improved economic outlook, unemployment falling faster than expected, improvements in consumer confidence and low interest rates.
“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. We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms.”
Nicholas Ayre, managing director of homebuying agency Home Fusion, said: “Prices continue to rise, mainly owing to a lack of stock coming to market, but the average value remains 10% below the August 2007 peak. The question is what does this mean for Mark Carney: does he leave things as they are or seek to put some limitations on schemes such as Help to Buy in order to stop prices running away with themselves?
“The housing market is off the ventilator and is breathing unassisted but it still needs oxygen. The market is not functioning normally because interest rates have had to remain at 0.5% for five years. It is clear that this has been a long recovery and it is not over yet. When interest rates do start to rise, it will cause a real problem for those heavily indebted homeowners, and will need to be handled with care.
“There are some concerns about buyers paying anything for a property owing to the lack of stock and a certain desperation. But the market as a whole is not running away with itself.”