About Halifax House prices rise again in UK10.09.2009

About Halifax House prices rise again in UK10.09.2009


Halifax declares that house prices in UK are at a similar level to December 2008.

House prices rose for a second consecutive month in August as demand for homes continued to grow at a faster rate than availability, mortgage lender Halifax said today.

Figures from the bank showed a 0.8% rise in prices over the month, while in the three months to August they were 1.7% higher than in the previous three months. This is the biggest increase in the three-month figure since July 2007.

Compared with August last year, however, prices are down by 10.1% on Halifax's index, which uses an average of the last three months' figures compared with the same period last year to determine an annual rate of deflation.

Martin Ellis, a housing economist of Halifax, explained the market had been boosted by an increase in interest from buyers, in fact demand for housing has increased since the start of the year due to

For several months, surveys have reported increasing demand for properties from would-be buyers keen to take advantage of lower prices and record low interest rates, but probable sellers have been sitting tight waiting for prices to rise.

Halifax's analysis illustrates the proportion of disposable income households devote to mortgage repayments has fallen significantly over the past 21 months, and are below the long-term average of 35% over the past 25 years.

Those who are able to raise mortgages are typically spending 29% of their take-home pay on servicing their debt, well below the peak of 48% in the autumn of 2007 when prices were at their highest.

In recent weeks inter-bank lending rates have started to fall, and some lenders have passed on these cuts through more competitive fixed- and discount-rate mortgages. However, they are still demanding large deposits from buyers and taking few chances on what they perceive to be riskier borrowers.

Although recent figures have shown an increase in the number of loans taken out for house purchases, with the Bank of England's latest survey showing a sixth monthly rise in July, activity remains below the recent historical average.


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