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UK house prices up 10% in year to July, says Halifax - Average house price now stands at £186,000, boosted by a 3.6% rise between May and July

Wednesday, August 06, 2014

House prices rose by more than 10% in the year to July, the biggest annual growth since the start of the financial crisis in 2007, according to the Halifax.

The price of the average house in the UK has risen by just over £17,000 in the last year to £186,322. This was helped by a 3.6% rise in prices in May to July compared to the period between February to April 2014, according to the bank.

"Annually prices were 10.2% higher in the three months to July than in the same three months last year," said Stephen Noakes, mortgages director at the Halifax. "While supply remains low, housing demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates. However, earnings growth is still lagging behind consumer price inflation."

House prices rose 1.4% in July, adding £2,500 to the average property price and reversing the 0.4% price decline in June. However, Halifax warned against reading too much into monthly price movements, which it said can be volatile and less reliable than longer term data.

Home owners are also becoming more positive about the idea of selling than they were, added the lender, adding that almost 60% of those surveyed as part of its housing market confidence tracker believe the next 12 months will be a good time to sell. This compares to 32% who feel it will be a bad time and is the highest positive score since the survey started three years ago.

Rival lender Nationwide said last week that while house prices rose by 0.1% in July, this was the smallest increase in 15 successive months of rises. It blamed new rules on mortgage lending, which it said had hit the supply of new loans.

Like the Halifax, it put the annual house price increase at 10.6% to July but said this was a lower rate of annual inflation than in June, when prices were up by 11.8% year-on-year.

"The marked rise in house prices reported by the Halifax in July contrasts with several other surveys reporting a recent moderation in house price growth which appears to be a consequence of a recent overall slowdown in housing market activity," said Howard Archer, chief UK economist at Global Insight. "On balance, we take the view that house prices will keep on clearly rising over the coming months but there will be some moderation from the recent peak levels."

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