Residential property prices in the UK rose for the third month in a row in September with the market now having seen values increase by an average of £10,000 since April, according to the latest published figures.
A lack of property on the market is driving a mini property boom with a strong jump of 1.6% last month, the figures from the Halifax show. The average price of a home in the UK is now £163,533.
These figures follow last week’s index from Nationwide which put UK house prices at the same level as September 2008, and reported the average price of home was £161,816.
Despite the good news for many property owners, Halifax said the market could yet prove to be volatile going into the traditionally quieter winter months. ‘Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand.’ said Martin Ellis, Halifax housing economist.
He then added; ‘There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale. This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months.’
And he pointed out that housing market activity may have improved in recent months but is still very low on a historical basis. The average UK house was valued at £199,612 in August 2007.
Seema Shah, a property economist at Capital Economics, said that recent price gains could be reversed in due course. ‘Currently, prices are being driven up by a shortage of property for sale. However, this can only be a temporary support. With unemployment set to rise further and the market still overvalued, in our view, the correction is far from over,’ Shah said.
And rating agency Fitch said that that house prices in Britain would fall by around 30% in total from the October 2007 peak, indicating that they have a further 17% left to fall.