Average house prices in the UK have risen by around £9,000 in just eight months, according to new data released by the Halifax Building Society.
The Halifax’s latest house price index also reveals that prices rose at their highest rate in three years in the year to June 2013, increasing by 3.7 per cent leaving the average house price in the country at £167,894.
On a monthly basis, prices rose by 0.6 per cent compared to May – the fifth consecutive month that prices have increased, while during the first quarter of this year there was a 2.1 per cent increase; the highest quarterly price increase since January 2010.
“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,” said Martin Ellis, Halifax’s housing economist.
Ellis also stated that s the government’s Funding for Lending Scheme launched in August 2012 and the first part of the Help to Buy Scheme, which opened in April, were also having an impact on demand.
Funding for Lending incentivises banks and building societies to lend more in return for discounted loans, while Help to Buy allows people to buy a property with a five per cent deposit. The state lends buyers 20 per cent of the value of a new home worth up to £600,000, interest-free for five years.
The Help to Buy scheme is due to beextended in January 2014 to include a state guarantee on mortgages.
While many view the return to strength of the UK’s housing as a positive step on the road to economic recovery, there are some economists who warn that the government’s schemes could lead to a housing bubble by artificially pushing up prices.