House prices climb to new high after 4% rise

Birmingham Post - - BUSINESS - Vicky Shaw

HOUSE price growth picked up last month to its fastest lev­els since Fe­bru­ary – push­ing av­er­age val­ues to a record high, ac­cord­ing to an in­dex.

Prop­erty val­ues were four per cent higher an­nu­ally in Septem­ber, mark­ing the high­est year-on-year fig­ure since a 5.1 per cent in­crease seen in Fe­bru­ary, Hal­i­fax said.

The av­er­age house price across the UK in Septem­ber was £225,109 – mark­ing the high­est fig­ure on Hal­i­fax’s records.

On a quar­terly ba­sis, house price growth also recorded its high­est growth rate since Fe­bru­ary, with val­ues 1.4 per cent higher be­tween July and Septem­ber than dur­ing the pre­vi­ous three months.

House prices rose by 0.8 per cent month-on-month, which was down on a 1.5 per cent in­crease in Au­gust.

Rus­sell Gal­ley, man­ag­ing direc­tor, Hal­i­fax Com­mu­nity Bank, said: “The an­nual rate of growth has picked up for the sec­ond con­sec­u­tive month, ris­ing from 2.6 per cent in Au­gust to four per cent in Septem­ber.

“The av­er­age house price is now £225,109 – the high­est on record. House prices in the three months to Septem­ber were 1.4 per cent higher than in the pre­vi­ous quar­ter, the fastest quar­terly in­crease since Fe­bru­ary.

“While the quar­terly and an­nual rates of house price growth have im­proved, they are lower than at the start of the year. UK house prices con­tinue to be sup­ported by an on­go­ing short­age of prop­er­ties for sale and solid growth in full-time em­ploy­ment.

“How­ever, in­creas­ing pres­sure on spend­ing power and con­tin­u­ing af­ford­abil­ity con­cerns may well dampen buyer de­mand.”

Mr Gal­ley also high­lighted re­cent spec­u­la­tion on the pos­si­bil­ity of an in­crease in the Bank of Eng­land base rate. But he said: “We do not an­tic­i­pate this will have a sig­nif­i­cant ef­fect on trans­ac­tion vol­umes.”

Howard Archer, chief eco­nomic ad­viser at EY ITEM Club, said he ex­pects house price growth to be “rel­a­tively muted” over the rest of the year, with a “mod­est” in­crease of two-three per cent in 2018.

He said: “Hous­ing market ac­tiv­ity is likely to be ham­pered by frag­ile con­sumer con­fi­dence and lim­ited will­ing­ness to en­gage in ma­jor trans­ac­tions.”

Samuel Tombs, chief UK econ­o­mist at Pan­theon Macroe­co­nomics, said: “We ex­pect most of the pick-up in Hal­i­fax’s in­dex to un­wind over the com­ing months.”

Mark Har­ris, chief ex­ec­u­tive of mort­gage bro­ker SPF Pri­vate Clients, said: “Mort­gage rates con­tinue to be com­pet­i­tive al­though swap rates have started edg­ing up on the back of all the talk about in­ter­est rate hikes.”

Mr Har­ris said that with some lenders hav­ing raised mort­gage rates or be­ing poised to do so.

“Bor­row­ers look­ing for one of the cheap­est fixed-rate mort­gages may wish to move sooner rather than later to se­cure one,” he added.

> Av­er­age house prices in the UK have reached a record high, says Hal­i­fax

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