House prices rise 5.4% year-on-year in August

House prices are up 5.4 per cent year-on-year in August, according to the latest Halifax house price index.

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The average price in the UK in August reached £170,231 compared to £160,292 in August 2012.

Quarterly figures show that the three months to August were 2.1 per cent up on the previous three month period.

On a monthly basis there was a 0.4 per cent rise from £169,567 in July – the seventh consecutive monthly increase.

Halifax housing economist Martin Ellis says: “Economic improvement and low interest rates, supported by official schemes such as Funding for Lending and Help to Buy, appear to have boosted housing demand in recent months.

”Nonetheless, relatively modest economic growth and below inflation rises in earnings are likely to act as a brake on the market. Overall, house prices are expected to rise gradually over the remainder of the year.”

Legal & General Mortgage Club managing director Ben Thompson says: “Today’s figures clearly confirm that the market is continuing to gather pace and that the recovery is well and truly on track. At the moment that pace is sustainable especially when you consider the downturn we have had since 2007.

”However the picture remains regional and patchy across the UK showing there is still work to be done in some areas.”