Building Finance News:– Annual house prices for the three months leading up to the end of February showed a year-on-year rise of 2.8 per cent, according to the Halifax House Price Index.
The latest quarter revealed a 1.8 per cent rise compared with the previous three months and February saw a 5.9 per cent increase in prices compared to January. The new figures take the average price of a house in the UK to £236,888.
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Halifax’s managing director, Roger Galley, said the latest data was the first time there was an annual, quarterly and monthly rise since October 2018.
“The shortage of houses for sale will certainly be playing a role in supporting prices. House price growth is now at 1.8 per cent, an increase from the 0.6 per cent fall last month, and back at the rate we saw from July to September 2018. Annual house price growth at 2.8 per cent, is within our expectations, but is fairly subdued compared to 2015 and 2016, when the average growth rate was 8.3 per cent.”
He said there were economic factors restricting greater growth in the market.
“People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five-year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”
January saw 101,170 home sales – close to the five year average of 101,291. This is the fifth consecutive month where over 100,000 homes have been sold, leading to a 0.9 per cent quarterly rise when comparing sales in November to January, according to HMRC stats.
Housing sales hold up despite economic pressures
Residential property developers can take heart over the new figures which help support their case that demand still outstrips supply when seeking building finance.
Bank of England industry-wide figures show the number of mortgages approved for house purchases, an indicator of completed house sales, rose 3.6 per cent to 66,766 in January. The January rate is marginally above the five-year average monthly approval rate of 66,366, and is 1,635 above the previous 12-month average.
But the Royal Institution of Chartered Surveyors’ residential market survey for January was less encouraging with a drop for the third month in a row on new enquiries, instructions and sales. National sales to stock level dropped to 31.5 per cent, which is the lowest rate it has been since September 2013.