House Price Growth Continuing To Accelerate

February’s Halifax House Price Index, released yesterday, confirmed that house prices are continuing to accelerate at a rapid pace, increasing by 2.4% over the month. This puts the average UK property at £179,872 with prices having now risen for 11 consecutive months, while on an annual basis they’re rising even faster by showing an increase of 7.9% year-on-year. Rising prices are being fuelled by the distinct imbalance between supply and demand as the level of housing stock hasn’t been enough to accommodate the increasing number of new buyer enquiries, with this demand being largely driven by a combination of reduced unemployment, low interest rates, increased consumer confidence and a better economic outlook overall, as well as Government initiatives such as Help to Buy. There are signs, however, that continuing pressures on household finances and the boost in housing starts last year (an increase of 24% on 2012’s total, according to figures from the Department for Communities and Local Government), could constrain upwards pressure on house prices, with supply and demand potentially starting to balance out to reduce the possibility of excessive rises in the medium-to-long term.