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House prices have strongest quarter in three years
Halifax optimistic after quarterly house price boost
by Michelle McGagh on Feb 06, 2013 at 12:39
The house price rally seen in December has carried on into the new year as the strongest quarterly rise is recorded in three years.
The Halifax House Price Index shows house prices in the three months to the end of January were 1.9% higher than in the previous three months, the strongest quarterly change in three years. Looking at the annual change, house prices were up 1.3% on a year ago, the first annual price rise for 27 months.
However, looking at January in isolation house prices actually fell 0.2% after successive rises in November and December. The average house in the UK is now worth £162,932.
Despite the slight blip in January prices, Halifax housing economist Martin Ellis is still optimistic about house prices in 2013.
This optimism is based on strong data at the end of 2012. Home sales increased 5% in 2012 to 932,000, the highest annual total since 2007’s 1,619,000 figure. Sales in the last three months of 2012 were 4% higher than the preceding quarter.
These sales reflect improvements in mortgage approval numbers. The number of mortgages approved to purchase homes rose for the fifth successive months in December and there was a 19% increase in approvals over the last five months of 2012.
The government’s Funding for Lending scheme, through which it has made £80 billion available to lenders to loan out, has boosted the number of mortgage approvals since it was launched in August.
Ellis said: ‘The signs of improvement in the housing market towards the end of last year continued in January.
‘Market activity has also improved with sales in 2012 at their highest for five years. Rising mortgage approval numbers point to further increase in home sales in the coming months. The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months. This is likely to have been a factor contributing to the pick-up in both home sales and prices.
‘The outlook for the UK economy and house prices, however, is more unclear than usual. Subdued economic growth and pressures on household finances are expected to constrain housing demand. Overall, we expect continuing broad stability in house prices nationally in 2013.’
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