House prices rising 'at fastest annual rate for three years'
- 4 July 2013
- From the section Business
House prices are rising at their fastest annual rate for nearly three years, according to one of the UK's biggest mortgage lenders.
The Halifax said prices in the three months to the end of June were 3.7% higher than in the same quarter last year.
That is the fastest rate of increase since August 2010.
The survey compares with a 1.9% annual increase reported by the Nationwide building society last week.
"Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices," said Martin Ellis, Halifax's chief economist.
The average price of a home in the UK is now £167,984, according to the survey.
The Halifax said the government's Funding for Lending Scheme (FLS) appeared to be boosting the market by helping to reduce mortgage rates.
Under FLS, banks and building societies are able to borrow money cheaply from the Bank of England, as long as they lend it out to individuals and businesses.
Mr Ellis added: "There are also early indications that the Help to Buy equity loan scheme may be stimulating demand."
The Help to Buy scheme launched in April 2013, and allows borrowers to take an equity loan from the government worth up to 20% of the price of a new house.
That, in turn, enables homebuyers to put down a smaller deposit.
But the Halifax also pointed out that the "subdued" economic background and "weak income growth" would continue to constrain demand for home buying.
Further evidence of an upturn in the housing market was provided by trading updates from two UK housebuilders.
Redrow said the number of homes it had built in the past year had risen by 15%, and added that its full-year profits, to be announced in September, were likely to be ahead of expectations.
Separately, Taylor Wimpey said it was trading "at the upper end of our expectations", adding that it had seen "signs of significant improvement in the housing market in the first six months of 2013".
Taylor Wimpey chief executive Pete Redfern suggested that FLS and Help to Buy were making an impact.
"We have seen increased consumer confidence, underpinned by generally improved access to, and affordability of, mortgage finance, and by the recent government measures," he said.