Property market springs back to life as cheap mortgages boost house prices by 1.9%
House prices have witnessed a 1.9% average rise in the three months to January, marking the strongest increase for three years.
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This is according to the latest market survey from Halifax, which hints that the Government’s Funding for Lending scheme to boost mortgage availability could be paying off.
The report picked up on recent figures from HM Revenue and Customs which showed that UK house sales rose to their highest levels since 2007 last year.
It also noted the significant increase in mortgage approvals, a trend which is an indication of what the property market has in store, according to the Bank of England.
The survey indicated that the Government’s multibillion-pound initiative has helped lenders to lower interest rates and improve availability in the past few months.
Howard Archer, economist at forecaster IHS Global Insight, said: “Recent signs of modestly improving housing market activity, supported by the Funding for Lending Scheme, and a moderate recent overall firming of prices suggest that there is a growing prospect that 2013 could be a slightly better year for the housing market.”
However, Martin Ellis, a housing economist at Halifax, said he expected broad stability across house prices nationally in 2013, and warned that housing demand could be negatively impacted by mounting pressure on household finances.
Experts say the housing market presents a “confused picture”. Mark Harris of mortgage broker SPF Private Clients said: “On the one hand, prices fell in January following rises in November and December, while on the other prices registered their first annual rise in 27 months.
“These national averages also conceal significant regional differences, with prices falling in parts of the country while rising in others.”
Halifax said that quarterly figures are a better guide to market trends because they “smooth out” month-on-month volatility.
If you are looking to get onto the property ladder, you can compare mortgages with MoneyExpert.