House prices in the three months from December 2012 to February 2013 were 1.9 per cent higher than in the three months previous, according to the Halifax House Price Index.
Prices were also 1.9 per cent higher than in the same period a year ago. This was the second consecutive rise in this annual measure and the biggest increase since September 2010.
The number of home sales increased slightly, from 82,280 in December 2012 to 82,320 in January 2013, according to the latest industry figures.
The ratio of house sales to the stock of unsold properties has risen a little since July 2012. This improvement in market conditions has been caused by the combination of higher sales and a reduced stock of properties available for sale.
The number of people in employment in the fourth quarter of 2012 was 584,000 higher than in the same period a year earlier. Higher full-time employment was responsible for two-thirds (67 per cent) of this increase. Rising employment is likely to have contributed to the overall improvement in housing market conditions in recent months. Pay growth, however, remains very subdued, increasing by just 1.4 per cent in the past year; well below the increase in consumer prices.
Commenting, Martin Ellis, housing economist, said: “The housing market continued to provide evidence of improvement in February. Prices in the three months to February were 1.9 per cent higher than in the previous three months. This was the third successive increase in this measure of the underlying trend. Prices were also 1.9 per cent higher than in the same period a year ago.
“House sales also continue on a modest upward trend. This increase in both house prices and activity in recent months is consistent with evidence of some improvement in market conditions. The more than half a million increase in the number of people in employment over the past year is likely to have been a factor supporting housing demand.
“We expect to see a national increase in house prices over the course of 2013. Weak income growth and continuing below-trend economic growth, however, are likely to remain significant constraints on housing demand.”
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