House prices in the UK increased by 3.7% year on year in August compared and were also up month on month by 0.1%, the latest lender index shows.
The data from the Halifax also reveals that on quarterly basis prices rose by 1.9%, taking the average price of a home to £229,958.
Russell Galley, managing director of the Halifax, pointed out that the annual rate of growth increased from 3.3% in July. ‘While the pace of employment growth has recently slowed, a low unemployment rate and a gradual pickup in wage growth are helping to support household finances,’ he said.
‘This has been accompanied by interest rates still remaining at a historically low rate and a stable, yet constrained, supply of new homes onto the market further supporting house prices,’ he added.
The figures are a sign of stability in the housing market, according to Russell Quirk, chief executive officer of Emoov. ‘We’ve seen prices maintain an upward trend since May now and although only marginal in August, this is widely expected and actually quite impressive for what is usually a very slow time of year for property transactions,’ he explained.
‘These latest figures suggest that the market is yet to lose its resolve and in fact, we should see market activity pick up significantly from now until Christmas bringing prices with it,’ he added.
But Kevin Roberts, director of the Legal & General Mortgage Club, a lack of adequate housing stock continues to impact the market, limiting the options for those looking to move onto and up the housing ladder or even downsize.
‘The result is that borrowers are being forced to rely on others, such as the Bank of Mum and Dad, which funds one in every four housing transactions. If we are to create a housing market that is fair and accessible for everyone, Government and industry must work together to deliver the additional 300,000 houses that we desperately need each year,’ he pointed out.
The stability is helpful as Britain moves ever closer to the date in March next year when the country leaves the European Union, according to James Newbery, investment manager at property investment platform British Pearl.
‘A fourth consecutive month of growth shows that Britain’s housing market is still on relatively robust ground. Annual growth continues to tick over reassuringly and these figures prove that the market is far from teetering on the edge,’ he said.
‘Investors are holding steadfast and are taking advantage of a market underpinned by a lack of stock, growing household incomes and a solid labour market. And despite the Government’s tightening grip on buy to let and painfully low transaction levels, we are still to see a sudden rise in stock availability due to landlords abandoning their portfolios,’ he explained.
‘The future direction of the market remains an unknown, but this latest data from the Halifax shows there is no immediate reason to abandon ship,’ he added.