House prices continue to rise – average home now worth £169,624

Latest figures from Halifax show that between May and July house prices were 2.1 cent higher than in the previous three months, and 4.6 per cent higher than the same period last year.

Overall, house prices increased by 0.9% in July, the sixth consecutive monthly rise, and home sales in the first six months of 2013 were 6 per cent higher than in the same period last year, at 495,000.

“Signs of improvement in the economy, underlined by the recent evidence of a rise in gross domestic product and increases in employment, appear to have boosted consumer confidence,” said Halifax housing economist Martin Ellis. “Greater confidence is likely to have underpinned the increase in housing demand. Official schemes, such as the Funding for Lending Scheme and the Help to Buy equity loan scheme, may also be raising demand. House prices are expected to continue to rise gradually through this year with only modest economic growth and still falling real earnings constraining housing demand and activity.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “‘It is still too early to describe the housing market as being in rude health, however, as there is a worrying lack of stock, which is the main driver behind the latest rise in house prices. However, the number of transactions is also on the rise.

“While the number of transactions continues to rise and the Council of Mortgage Lenders also report that lending numbers are the strongest they have been since 2008, this will be a long, slow recovery. Much ground has been lost and transactions and lending levels are running at a fraction of what they were at the height of the housing boom. Government schemes such as Funding for Lending and Help to Buy are seeing a positive impact though, and we expect this to continue when the mortgage guarantee element of Help to Buy is introduced in January.”