House prices up in UK as sales improve
House prices and sales are both improving in the UK, according to Halifax.
The lender’s latest House Price Index shows that house prices in the UK climbed by 1.5 per cent quarter-on-quarter in three months to May. This compared with the 1.3% rise recorded last month.
House prices increased by 0.4% in May compared to the previous month - the fourth monthly rise in a row.
Indeed, house prices have been rising modestly on this three month-on-three month measure since December 2012, adds Halifax, with increases of between 1% and 2% in each of the past five months.
The average price of a UK home is now £166,898 - 2.6% higher than in the same three months last year and the biggest increase since September 2010 (2.6%).
The positive growth occurs amid a “modest pick-up” in home sales. Home sales in the three months from February to April were 2% higher than in the preceding three months (November 2012-January 2013) despite a 5% decline between March and April, according to the latest seasonally-adjusted figures from HMRC.
The ratio of house sales to the stock of unsold properties has increased since last autumn. This evidence of strengthening in demand relative to supply helps to explain the modest rise in house prices over recent months.
Commenting, Martin Ellis, housing economist, said: "House prices continue to pick up gradually. Prices in the three months to May 2013 were 1.5% higher than in the preceding three months. This was slightly higher than the 1.3% increase in the three month-on-three month measure in April.
"Market activity has also improved slightly in recent months although home sales remain low by historical standards.
"Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity."