House prices see 7.5% increase
%VIRTUAL-SkimlinksPromo%House prices surged by 7.5% annually in December but fell back month-on-month for the first time in almost a year, Halifax has reported.
The year-on-year increase was close to a 7.7% rise recorded in November, which was the highest annual lift seen in six years.On a monthly basis, prices edged downwards by 0.6% in December, marking the first fall in 11 months and taking the average house price to £173,467.
But Halifax said that monthly price movements can be "volatile" and on a quarterly basis, which is generally a more reliable indication of the underlying trend, prices lifted by 1.9%.
Halifax has predicted that house prices are set to rise this year at a similar pace to 2013, with an increase of between 4-8% across the UK over 2014.
It undertook recent research which found that more than half (51%) of people think 2014 will be a good time to sell a property, compared with 39% who believe it will be a bad time.
This is the first time since the regular survey began in spring 2011 that the proportion of people thinking it would be a good time to sell outweighed those who say it would be a bad time.
A lack of homes on the market is one of the main factors which housing market experts say has been pushing up house prices as demand from would-be buyers has been increasing in recent months amid Government schemes such as Help to Buy to give people a helping hand on or up the property ladder.
Martin Ellis, Halifax housing economist, said: "The recent strengthening in house prices is increasing the amount of equity that many home owners have in their home.
"This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply.
"Indeed, our consumer confidence research shows that there has been a significant improvement in sentiment towards selling in recent months. These factors should help to curb the upward pressure on prices."
Halifax's study comes after building society Nationwide recently reported that house prices surged by 8.4% over 2013 across the UK as the market revival became increasingly broad-based across the country.
Howard Archer, chief UK and European economist for IHS Global Insight, said: "Latest surveys and data on the housing market are largely robust and there is a very real risk that a new housing bubble could really develop in 2014 - especially as the strength in house prices is becoming widespread."
Mark Harris, chief executive of mortgage broker SPF Private Clients, highlighted toughened mortgage lending rules which are set to come into force in April.
The Mortgage Market Review rules are being put in place to make sure there is no return to irresponsible lending and that borrowers can only take out deals that they can afford to pay back.
Mr Harris said: "Lenders are keen to have a strong first quarter and continue to offer some extremely attractive mortgage rates.
"With the Mortgage Market Review set to be introduced at the end of April, this will likely lead to a
slowdown in lending as lenders get to grip with the changes they need to introduce."
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House prices see 7.5% increase
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