House prices rise for third consecutive quarter
According to the Halifax House Price Index, prices in the three months from December were 1.9% higher than the previous three months, and were also 1.9% higher than the same quarter last year – the biggest annual increase since September 2010.
February saw prices rise, following a slight fall at the start of the New Year. At 0.5%, the figure from Halifax is slightly higher than the 0.2% rise suggested by Nationwide.
Halifax housing economist Martin Ellis said:
“We expect to see a national increase in house prices over the course of 2013. Weak income growth and continuing below-trend economic growth, however, are likely to remain significant constraints on housing demand.”
Dragonfly Property Finance chief executive Jonathan Samuels said it was an upbeat reading but the overall economic backdrop remained challenging:
“There has definitely been a rise in activity levels in recent months and the relatively robust jobs market will surely have contributed to this.
“Soaring demand for buy-to-let property is also driving up prices. Landlords are snapping up property left, right and centre in a bid to secure the high returns available.
“Despite the annual change of 1.9%, the property market remains very fragmented. Certain areas, primarily London and the South East, continue to strengthen whereas much of the North remains under pressure.”
SPF Private Clients chief executive Mark Harris said the housing market presented a confused picture:
“It is worth remembering that national averages also conceal significant regional differences, with prices falling in parts of the country while rising in others. The north-south divide grows ever wider.
“Lenders continue to cut mortgage rates, undercutting each other almost on a daily basis. While this is good news from the borrower’s perspective, particularly those with big deposits, we also need to see some easing of criteria in order to make mortgages more accessible. This is surely the next move for lenders, many of whom tell us they have had enough of a rate war and the pressure to constantly offer the cheapest rates.
“More options at better rates at higher LTVs are filtering through, and we need more of these to support the first-time buyer market.”