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House prices rise 0.5% in February

House prices rose 0.5 per cent in February, taking the average cost of a home in the UK up from £162,844 in January to £163,600.

Prices in the three months to February were up 1.9 per cent compared with the preceding three months, representing the third consecutive increase in this measure of the underlying trend.

House prices in the three months to February were 1.9 per cent higher than in the same three months a year ago. This represents the second successive rise in this annual measure and was the biggest increase since September 2010 when the increase was 2.6 per cent

Halifax housing economist Martin Ellis says: “The housing market continued to provide evidence of improvement in February.

“House sales also continue on a modest upward trend. This increase in both house prices and activity in recent months is consistent with evidence of some improvement in market conditions. The more than half a million increase in the number of people in employment over the past year is likely to have been a factor supporting housing demand.”

House sales rose from 82,280 in December to 82,320 in January, representing the seventh successive monthly increase in sales.

The number of mortgage approvals for house purchases fell by 2 per cent between December and January.

Looking to the year ahead, Ellis forecasts a continuation of the existing constraints on demand but also for house prices to gradually trend upwards.

He says: “We expect to see a national increase in house prices over the course of 2013. Weak income growth and continuing below-trend economic growth, however, are likely to remain significant constraints on housing demand.”

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