House price rises gaining pace, Halifax says

Prices in the three months to August were 5.4% higher than in the same period a year earlier, which also represents the highest annual rate rise since June 2010 (see our 50 House Buying Tips guide).

Month-on-month, prices rose 0.4% in August, the seventh consecutive monthly increase, with the average house price reaching £170,231.

Building society Nationwide published data last week that paints a similar picture. It said prices rose by 0.6% between July and August, while property values rose 3.5% compared with the same time in 2012, taking the average price for a UK home to £170,514 (see the House prices up again in August MSE News story).

The rise in house prices can be partly attributed to economic improvement and Government schemes, says Halifax housing economist Martin Ellis, although further increases are being held back by tight household budgets and stagnant salaries.

Ellis says: "Modest economic growth and below-inflation rises in earnings are likely to act as a brake on the market. Overall, house prices are expected to rise gradually over the remainder of the year."

Estate agents and property websites have reported that initiatives such as Funding for Lending, NewBuy and Help to Buy have contributed to improvements in mortgage availability and rates.