House prices across Britain recorded a year-on-year rise of 9.7 per cent in October to reach a new record, according to the latest survey from the Halifax.
With a time of increasing demand coinciding with a shortage of properties on the market, Halifax now puts the average price of a UK house at £205,240 – some £10,000 higher than the average recorded by Nationwide last week.
Martin Ellis, the bank's housing economist, said, "Improving economic conditions and household finances, together with sustained low mortgage rates, have boosted housing demand during 2015. Strengthening demand is filtering through into higher sales levels although the ongoing shortage of supply is acting as a significant constraint on activity.
"The imbalance between supply and demand is likely to persist over the coming months, maintaining upward pressure on house prices."
Recent research by the Halifax suggested that 68 per cent of home owners expected the value of their properties to increase over the coming year and official figures are showing that, despite the property shortage, activity in the market is continuing to increase.
Bank of England data show the number of mortgage approvals increased by four per cent in both the second and third quarters, while figures from HM Revenue and Customs figures showed that UK house sales increased by one per cent to 106,000 between August and September.
Samuel Tombs, housing economist at Pantheon Marco, said, "The latest year-over-year growth rates of the Nationwide and Land Registry measures are less punchy (than Halifax's) at 3.9 per cent in October and 5.3 per cent in September respectively.
"Nonetheless, momentum is clearly returning to the housing market as low mortgage rates, high consumer confidence and strengthening wage growth stimulate demand. Banks continue to seek to increase their mortgage loan books, and the Financial Policy Committee's rules on loan-to-income multiples are still not close to biting. As a result, we think rapid growth in house prices will be sustained; we expect an 8 per cent jump next year."
Under Halifax's calculations, property values increased by 1.1 per cent month-on-month in October and, on a quarterly basis, prices in the three months the end of October were 2.8 per cent higher than between May and July.
Howard Archer, chief UK and European economist for IHS Global Insight, said, "Taking an overview of the various surveys, we expect house prices to rise by around six to seven per cent in 2016."
Jeremy Leaf, a north London estate agent and a former chairman of the Royal Institution of Chartered Surveyors, said the upward trend in prices would make life difficult for would-be house buyers in the New Year.
"Prices are high and supply low – that imbalance makes life very tricky for buyers. Those looking forward to welcoming in the New Year in a new home might be struggling to achieve this unless they are prepared to pay for it," he said.For more Re:locate news and features on residential property, click here and for more on commercial property, click here
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