House prices rise by another 0.6%, the Halifax says
Tue 9th Feb 10 - 13:35

House prices have risen for the seventh consecutive month - rising by 0.6% in January compared with December, the Halifax has said.

The average UK home was valued some 3.6% higher in January than a year earlier, at £169,777.

The figures show the continued trend of rising prices which has helped mortgage providers ease their lending criteria slightly. However, the Halifax is predicting that prices will stay flat overall in 2010.

The Halifax, which is now owned by the Lloyds Banking Group, said that the average price of a UK home was now 9.9% above its trough in April 2009.

However, housing economist Martin Ellis said that January's rise was more modest than in any of the previous six months. The average rise of the previous six months was 1.1%.

Rising values

The annual rise is calculated using an average of the last three months with the same three months a year earlier.
 
This has risen sharply owing to the low levels of a year ago. Interest rates have also been at a historically low level, which has helped make mortgages more affordable, Mr Ellis said.
 
"The marked reduction in interest rates over the past 15 months has, from a low base, boosted housing demand from those with a sufficient deposit to enter the market," he said.

"Increased demand has combined with a low supply of properties available for sale to push up prices."

Since April, there has been an increase in the average property price of £15,287. However, this followed a notable house price slump when prices declined by 23% between August 2007 and April 2009.

Supply of homes

Mr Ellis added that the state of the economy would be the dominant factor for the future trend for house prices.

However, he said that there were signs that more people were putting up homes for sale, which would curb any future rises.

The Halifax's figures show that the pace of increase in house prices has been slackening off a bit. Prices in the past three months were 3.3% higher than in the previous three months.

That was down from the recent high point recorded in November, when the three-month on three-month rate hit a peak of 3.7%. That was the highest it had been since November 2006.

Rising prices have helped lead to a rise in the availability of mortgages over the last month.

The number of deals on offer is up 20% compared with the start of the year, figures from financial information service Moneyfacts show. Some of these include deals requiring a relatively small deposit of 10%.

Catherine Penman, head of research at property company Carter Jonas, said that the housing market was still starved of good quality homes for sale. She said that uncertainty in the market and the economy was preventing people with premium homes in good locations selling up. Predicting a 5% fall in prices in 2010, she said that the regional market was slow. London was an isolated case, where the market was buoyant owing to international buyers. "The price of a property is defined by its location and quality, not what is happening in the broader market," she said.

David Bagshaw, Managing Director of Financial Advisory Line commented “the signs are encouraging that market is picking up and we can see the lenders moving criteria to support the public in their need for Lending, lets hoe that this continues”

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