UK house prices have risen at the fastest level in three years, with prices in the three months to June 3.7% higher than in the same three months last year.
According to Halifax’s House Price Index for June 2013, prices in the three months to June were 2.1% higher than in the previous quarter.
Martin Ellis, housing economist at the Halifax, said: ““House prices continue to rise steadily. Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices.”
House prices in the second quarter of 2013 were 2.1% higher than in the first quarter of the year – as a result, house price growth between the latest three months and the preceding three months edged above the 1-2% range that it had been in throughout the preceding five months.
Both home sales and mortgage approvals for house purchase – a leading indicator of sales – increased in May.
Ellis highlighted the impact of Government schemes Funding for Lending and Help to Buy’s impact on the housing market.
He explained: “The Funding for Lending Scheme is also likely to be boosting the market by helping to reduce mortgage rates. There are also early indications that the Help to Buy equity loan scheme may be stimulating demand.”
The Funding for Lending Scheme was launched in April 2012 to offer subsidised credit to banks and building societies in order to boost lending to UK households and non-financial companies.
Under Help to Buy, shared equity loans will be available to anyone with a 5% deposit for a home, not just first-time buyers, and will be equal to 20% of a property’s value.
However, Ellis warns that “despite these signs of improvement in the market, the still subdued economic background and weak income growth are expected to remain significant constraints on housing demand and activity during the second half of 2013.”