United Kingdom house prices are up this year, sparked by a supply shortage and low mortgage rates, according to the latest house price index Monday from British bank and mortgage lender Halifax.
House prices increased 1.5% month-on-month in March. This exceeded the 0.2 per cent figure that economists had been expecting and was the biggest rise since August.
These figures contrast with those released last week by the Nationwide which says house prices grew 2.1 per cent year-on-year in March, slower than the 2.2 per cent increase seen in February and well below some analysts' expectations.
Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "The jump in Halifax's measure of house prices in March just looks like volatility, rather than the start of a strong upward trend". Compared to February, in March, prices rose by 1.5%, while experts on average expected a rise of only 0.2%. "Halifax's index is prone to large swings; the standard deviation of month-to-month growth since 2010 has been twice as high as for Nationwide's measure". The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £227,871 is a new high, ' Halifax managing director Russell Galley said.
However, Halifax also cited previous research showing that mortgages have reached their most affordable level in a decade. Halifax is predicting annual price growth to remain close to 3%.
Typical mortgage payments accounted for less than a third of homeowners' disposable income in the fourth quarter of 2017 compared to nearly half in 2007, Halifax said.
"The continuing shortage of properties for sale will also support price growth", Galley added.