House prices up by 0.2%
Posted: 03 Aug 2006 16:05:19 GMT
House prices increased by 0.2 per cent in July after two successive months of decreases, reports Halifax.
In the July index the average price of a house now stands at £177,020 and Halifax have increased their price increase forecast from three per cent to five per cent.
There is more momentum this year than expected, however strong figures were apparent last year and then fell away slightly bringing down the yearly average.
Martin Ellis, chief economist for Halifax, stated: "This mixed pattern of monthly price rises and falls is a typical feature of a more stable housing market. Overall, house prices have increased by only 0.9 per cent in the past four months compared with a 3.3 per cent rise in the preceding four months.
"We expect the annual rate of house price inflation to ease, partly because the corresponding figures last year were strong. Increased pressure on householders' finances and mounting speculation of interest rate rises are also likely to curb demand."
Sound fundamentals have so far maintained a healthy market. The UK economy has strengthened with high employment and low interest rates. Buyer confidence is high and the Bank of England compounded this point by revealing that mortgage approval was also healthy.
The majority of house price studies are highlighting the strength of the market, however most believe that growth will cool off towards the end of the year especially if interest rates are increased.