House prices up 9% in the past year

House prices rose 9 per cent year-on-year in the three months to August, says Halifax.

Annual growth in August was lower than June’s 9.6 per cent but higher than last month’s 7.8 per cent.

On a monthly basis, the average price was up 2.7 per cent to £204,674.

Halifax housing economist Martin Ellis says: “The underlying pace of house price growth is strong. The shortage of secondhand properties for sale on the market is resulting in upward pressure on house prices. At the same time, economic recovery, real earnings growth and very low mortgage rates are supporting housing demand. Strengthening demand and highly constrained supply are likely to mean that house price growth continues to be robust in the short-term.” 

Legal & General Mortgage Club director Stephen Smith says: “The increase in house prices in August compared to the same period last year shows the sheer scale of the rift between supply and demand. This imbalance is causing houses prices to climb in months that typically see less activity in the market. This trend is likely to continue in the long-term unless more houses are built so that there are enough homes available for people to buy.

“The country needs to develop a long-term solution to this issue to stop house price growth from exceeding inflation and earnings growth. The longer this continues, the more people it will push out of the market.”