UK house prices rise at fastest pace since 2006

by Agency Reporter

United Kingdom house prices rose the fastest in almost eight years in the three months through July, as the strengthening economy and increasing confidence bolstered demand, according to Halifax.

Values jumped 3.6 per cent compared with the previous three months to an average 186,322 pounds ($314,195), the Lloyds Banking Group Plc mortgage unit said in a statement today.

From June, prices rose 1.4 per cent, compared with the 0.4 per cent gain forecast by economists in a Bloomberg survey.

While the data suggests the boom in British property is continuing, other survey indicate that the market is cooling after stricter lending rules took effect.

Nationwide Building Society said last week that prices grew at the slowest pace since April, and Halifax said a growing number of people now think it’s the right time to sell.

There is “uncertainty over the true state of the housing market,” said Howard Archer, an economist at Global Insight.

It’s unclear whether the recent decline in housing activity will last or if it is “just a temporary development related to changing mortgage regulations,” he said.

Prices were up 10.2 per cent in the three months through July compared with the same period a year earlier, the biggest increase since September 2007, the Halifax report showed.

“Demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates,” said Stephen Noakes, mortgages director at Halifax.