19 January 2010
Figures from the Halifax House Price Index show average UK house prices in December 2009 were 5.6% higher than the same month the previous year. Halifax, like C&G, is part of the Lloyds Banking Group.
This growth has surpassed most people's expectations. It has been fuelled by a relatively low supply of residential property for sale in the market, coupled with fairly buoyant demand, particularly from buyers requiring low loan-to-value mortgages and cash buyers.
Low mortgage interest rates have also helped to stimulate demand.
The numbers are based on Halifax mortgage approvals data, which reflect the most up-to-date HPI trends. Data from Nationwide on the same basis show similar growth of 5.9% in 2009. The increase in house prices in 2009 may encourage more sellers to put their property on the market - changing the supply/demand ratio and gradually taking the heat out of price rises in 2010.
Commenting, Martin Ellis, housing economist for the Halifax, said, "The prospects for the market this year will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our current view is that house prices will be flat during 2010.“
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