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| House prices show biggest annual leap in six years, says Halifax | House prices show biggest annual leap in six years, says Halifax |
| (4 months later) | |
| House prices in the UK rose by 7.7% in the year to November as the supply of homes for sale failed to keep up with increased demand, according to the latest figures from the country's biggest mortgage lender. | House prices in the UK rose by 7.7% in the year to November as the supply of homes for sale failed to keep up with increased demand, according to the latest figures from the country's biggest mortgage lender. |
| Halifax's latest house price index recorded its biggest annual leap in six years as low mortgage rates and the Help to Buy scheme encourage buyers into the market. | Halifax's latest house price index recorded its biggest annual leap in six years as low mortgage rates and the Help to Buy scheme encourage buyers into the market. |
| The lender said prices were up by 1.1% in November alone, at an average of £174,910, while the three-month growth figure hit 2.1%. | The lender said prices were up by 1.1% in November alone, at an average of £174,910, while the three-month growth figure hit 2.1%. |
| Halifax's figures are based on mortgages which it has approved during the month, and as it is one of the first lenders to take up the taxpayer-backed guarantee on 95% Help to Buy mortgages they will include buyers who are taking advantage of the scheme. | Halifax's figures are based on mortgages which it has approved during the month, and as it is one of the first lenders to take up the taxpayer-backed guarantee on 95% Help to Buy mortgages they will include buyers who are taking advantage of the scheme. |
| Its annual figures are based on a comparison of three months of figures on the same period of the previous year, and a straight year-on-year comparison puts the annual growth rate at 8.4%. | Its annual figures are based on a comparison of three months of figures on the same period of the previous year, and a straight year-on-year comparison puts the annual growth rate at 8.4%. |
| Halifax's housing economist, Martin Ellis, said: "Stronger demand, combined with an insufficient increase in housing supply, has resulted in increases in house prices accompanying higher activity this year. | Halifax's housing economist, Martin Ellis, 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." | "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." |
| The Bank of England has said it will refocus the Funding for Lending scheme which has allowed banks and building societies to offer cheap mortgage deals to channel the money towards business lending. | The Bank of England has said it will refocus the Funding for Lending scheme which has allowed banks and building societies to offer cheap mortgage deals to channel the money towards business lending. |
| The move will come into effect in the new year and could lead to an increase in mortgage rates, although brokers predict that competition in the market will prevent any big leap in costs. | The move will come into effect in the new year and could lead to an increase in mortgage rates, although brokers predict that competition in the market will prevent any big leap in costs. |
| Halifax's figures show that rising house prices and squeezed incomes are putting pressure on households who want to buy, with the average property price now 4.77 times the average income of a full-time male employee, up from 4.43 in November 2012. | Halifax's figures show that rising house prices and squeezed incomes are putting pressure on households who want to buy, with the average property price now 4.77 times the average income of a full-time male employee, up from 4.43 in November 2012. |
| Ellis said this was likely to dampen future price rises. "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," he said. | Ellis said this was likely to dampen future price rises. "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," he said. |
| "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." | "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." |
| However, Matthew Pointon, property economist at Capital Economics, said the data would add to the pressure on the Bank of England to do more to calm the market. "There are reasons not to panic quite yet. For one, there is no evidence that banks are about to rapidly loosen their lending standards and kick-off a new credit boom," he said. | However, Matthew Pointon, property economist at Capital Economics, said the data would add to the pressure on the Bank of England to do more to calm the market. "There are reasons not to panic quite yet. For one, there is no evidence that banks are about to rapidly loosen their lending standards and kick-off a new credit boom," he said. |
| "If the spring brings a tide of sellers who have so far been delaying putting their home on the market, that will help take the heat out of price rises. But if those sellers do not return early next year, the risk of an unsustainable rise in house prices will grow." | "If the spring brings a tide of sellers who have so far been delaying putting their home on the market, that will help take the heat out of price rises. But if those sellers do not return early next year, the risk of an unsustainable rise in house prices will grow." |
| The autumn statement on Thursday contained details of a £1bn loan fund to "unblock" large housing developments around the UK in a bid to create new homes to meet demand. | The autumn statement on Thursday contained details of a £1bn loan fund to "unblock" large housing developments around the UK in a bid to create new homes to meet demand. |
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