House prices rise 8.6% in a year
The average price of a home in the UK rose by 8.6% to £202,859 over the year to September, fuelled by short supply and rising mortgage approvals, according to the latest house price index from the Halifax.
However, prices actually fell by 0.9% in August and the annual rate of growth fell from 9% the previous month.
Property transactions are on the rise though. HM Revenue & Customs (HMRC) says property sales rose 3% in the month to August, to the highest level since February 2014. While mortgage approvals increased for the third consecutive month, also to the highest level in over a year, according to the Bank of England.
Martin Ellis, housing economist at the Halifax, said: “Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates.”
Housing remains in short supply, with the National Housing Federation recently estimating about half the required number of new properties were built between 2011 and 2014.
The Royal Institute of Chartered Surveyors says properties on the market reached a record low in August, as the number of people listing properties for sale fell for the seventh consecutive month.
Ellis added: “Increasing demand is combining with very low supply to drive robust underlying house price growth. There is little reason to expect any fundamental shift in the key market drivers over the coming month.”
The Halifax report said prices for flats are increasing much more quickly than other residential properties. The average price of a flat is 60% higher than a decade ago, while detached houses have increased by just 21%.