Halifax, the UK’s largest lender, on Thursday reported that house prices increased by 1.2 per cent in September, taking the annual rate of increase to 3.0 per cent.
The figures were at odds with last week’s data from Nationwide, the building society, which showed house prices falling 0.2 per cent in September, leaving average prices only 1.8 per cent higher than in September last year – a nine-year low.
Martin Ellis, Halifax chief economist said: “The pick-up in monthly house price inflation in August and September is consistent with the rise in market activity over the past few months.”
He added: “Healthy household income growth and historically high levels of employment are supporting the housing market and the Bank of England’s decision to cut interest rates in August also appears to have given the market a boost”.
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In September, Halifax reported a surprisingly strong up-turn in house prices for the month of August with a 1.6 per cent month-on-month increase, the strongest monthly rise since September 2004.
The current level of house price activity would have been one of the issues under discussion at the meeting of the Bank of England’s monetary policy committee on Thursday. The MPC left its main rate unchanged at 4.5 per cent in line with expectations.
The number of mortgage approvals to fund house purchase was 15 per cent higher than in August 2004, marking the first time in 2005 that approvals have been higher than a year ago.
The latest monthly report from Royal Institute of Chartered Surveyors also recorded an increase in completed property sales for the second successive month in August, while new buyer enquiries rose for the third consecutive month, up at the fastest pace since January 2004.
