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UK house prices 'rise at fastest rate since 2010' | |
(about 1 hour later) | |
UK house prices have risen by 5.4% in the year to August, according to the Halifax's latest house price survey. | |
It is the highest annual rate since June 2010. | |
On the Halifax's measure, the average price of a house also went through the £170,000 mark for the first time in five years. | |
However, the figures are still well below the peak of the market in August 2007, when the average price was almost £200,000. | |
The Halifax said housing market activity was up thanks to an improving economy, low interest rates, and government-backed schemes such as Help to Buy. | |
Earlier this month the Nationwide said house prices in August were rising at an annual rate of 3.5%, slightly slower than in July. | |
The Nationwide compares prices in one month with the same month a year ago. | |
However, the Halifax compares a three-month period with the three-month period in the previous year. | |
Martin Ellis, the Halifax's housing economist, said: "Overall, house prices are expected to rise gradually over the remainder of the year." | Martin Ellis, the Halifax's housing economist, said: "Overall, house prices are expected to rise gradually over the remainder of the year." |
The Halifax believes below-inflation pay rises "are likely to act as a brake on the market". | |
Property bubble | Property bubble |
The Halifax estimates the average price of a house or flat in the UK is now £170,231. The last time house prices were higher than £170,000 was in September 2008. | |
The number of mortgage approvals for house purchases - an indicator of completed house sales - rose by 10% between the first and second quarters of 2013. | |
In July alone there were 60,600 approvals, the first time the number has exceeded 60,000 since 2008. | |
The rise in prices and market activity, coupled with the Help to Buy scheme, which offers a government-backed loan of up to 20% of the price of the property, have increased fears that the country could be heading for another property bubble. | |
But last month Mark Carney, governor of the Bank of England, said he was "acutely aware" of the risks, and had a "toolkit" of measures he could employ to combat unrestrained mortgage lending. | |
Matthew Pointon, property economist at consultancy Capital Economics, said: "A short-term imbalance between housing demand and the number of homes on the market is driving price increases. | Matthew Pointon, property economist at consultancy Capital Economics, said: "A short-term imbalance between housing demand and the number of homes on the market is driving price increases. |
"But the rise in wholesale interest rates seen over the past few weeks may soon start to feed through to mortgage rates, dampening demand." | "But the rise in wholesale interest rates seen over the past few weeks may soon start to feed through to mortgage rates, dampening demand." |
There are already signs that mortgage rates may have bottomed out, with some lenders increasing rates earlier this week. |