House prices for the three months to November were 7.7 per cent higher than in the same period last year, the latest Halifax House Price Index has found, with inadequate increase in supply the main contributor to the rise.
The figure was also an increase on the June to August period of this year, up 2.1 per cent; this was in line with the quarterly rises of 2 – 2.1 per cent recorded throughout the four months from June to September.
While November was the tenth successive month of house price rise, the average asking price remains 12 per cent below the peak.
Home sales increased for the sixth successive month in October to 94,950; 24 per cent higher than in October 2012.
The number of mortgage approvals for house purchases was 11 per cent higher in the three months to October than in the previous quarter and 31 per cent higher than in the same three months last year.
Despite supply failing to meet demand, private sector housing starts in England increased by 10 per cent between the second and third quarters of 2013 to 26,380; the highest level since 2008 and 28 per cent higher than in the third quarter of 2012.
Commenting, Martin Ellis, housing economist, said: “”Stronger demand, combined with an insufficient increase in housing supply, has resulted in increases in house prices accompanying higher activity this year. Low interest rates, improvements in consumer confidence and official schemes, such as Funding for Lending and Help to Buy, all appear to have boosted demand. However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices. We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms.”
