House prices still rising

8 March 2007

House prices are still rising, according to figures from the UK’s biggest mortgage lender.

In its monthly survey, The Halifax reported that the average house price is now £192,233. And the mortgage lender says house prices rose by 1.8% last month, which keeps the annual rate of house price inflation at about 10%.

February’s figure of 1.8% is the strongest monthly rise recorded by the Halifax since last October. The mortgage lender’s chief economist, Martin Ellis, said: “A shortage of both new and second-hand properties available for sale has continued to push house prices up so far in 2007, particularly in London.”

However, he maintains that house price inflation will slow considerably during the second-half of 2007, as the recent increases in interest rates begin to bite.

Many analysts are predicting that the higher base rate and rising house pries will make it extremely difficult for many would-be first-time buyers to enter the market – which will dampen things down. There’s already evidence that the number of new mortgage approvals – a key indicator of activity in the housing market – has been slowing down recently.