House prices have increased year-on-year for the first time in 2 years, according to the Halifax. The bank also reported on the highest quarterly increase in 3 years.
Despite a 0.2% drop in January, the quarterly figure stands at +1.9%, the most significant rise since January 2010. Year-on-year a rise of 1.3% was recorded.
The Government’s Funding for Lending scheme is likely to have played a part in house price rises, which has made it easier to obtain finance to buy a home. The mortgage approval rate has been increasing steadily over the last five months, with December’s approval figure reaching 55,785.
With increased demand for housing comes overall price rises. Some experts, however, have been keen to temper enthusiasm by pointing out that the UK’s economic outlook remains challenging, with household spending remaining constricted. Rises substantially larger than those already seen are considered unlikely by most commentators.
The Halifax puts the current average UK house price at £162,932 for January, a figure very close to the Nationwide’s estimate of £162,245. The Nationwide reported a rise in house prices of 0.5% in January, but said that over the last 12 months they had not seen any movement on the average house price, according to their own figures.
Most industry voices, however, point out that house buying activity has seen an overall modest improvement since the lows of mid-2012. As far as our buy to let insurance customers are concerned, 2013 is likely to be a good time to invest in further properties, given relatively subdued house prices.