The property market for homes increased by more than 10% in the year ending in July. This is the largest annual growth since the beginning of the financial crisis in 2007. The average house price in the UK has risen by just over £17,000 in the last 12 month period to £186,322. A 3.6% rise in prices in May to July compared to the period between February to April 2014, helped to increase the average.
Prices were 10.2% higher in the three months to July than in the same three months in 2013. Stephen Noakes, the mortgages director at the Halifax Bank said housing demand continues to be supported by an ongoing economic recovery, employment growth, improvement in consumer confidence and mortgage rates which remain low. The one important negative is earnings growth is not keeping up with inflation in consumer prices.
House prices increased 1.4% in July, which reversed the 0.4% price decline in June. However, Halifax Bank cautioned against assuming that monthly price movements are reliable predictors. These monthly prices can be volatile, and they are less reliable than data accumulated over the longer term. Analyzing long term data will present a more complete picture of price trends and the property market update.
Home owners are also becoming more positive about the market than they were in the previous 12 months. The housing market confidence tracker showed 60% of homeowners surveyed believe the next 12 months will be a good time to sell. This is the highest positive score in the three year existence of the survey.
Nationwide, a major housing lender said that the increase in house prices which was 0.1% in July, should not be viewed with optimism since this was the smallest increase in 15 successive months. Nationwide said new rules on mortgage lending had reduced the supply of new loans.
Like the Halifax, it put the annual house price increase at 10.6% to July but said there was a lower rate of annual inflation than in June, when prices were up by 11.8% year-on-year.
Howard Archer, chief UK economist at Global Insight said he takes the view that house prices will clearly continue to rise in the future months, but he is of the opinion there will be some reduction in the recent peak levels.