Salisbury JournalHouse prices rise by 7.9% - Halifax (From Salisbury Journal)

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House prices rise by 7.9% - Halifax

Salisbury Journal: House prices rose by 7.9% last month compared with February last year, Halifax says House prices rose by 7.9% last month compared with February last year, Halifax says

House prices surged at their strongest annual rate since 2007 in February amid improving consumer confidence and continued access to cheap mortgage deals, Halifax has reported.

Values lifted by 7.9% on a year ago, taking the average price across the UK to £179,872 and marking the strongest annual uplift since October 2007.

The pace of the annual rise has strengthened from 7.3% in January.

Prices were 2.4% higher than a month earlier, which Halifax said is in line with recent average monthly increases.

Stephen Noakes, mortgages director for Halifax, said the improving economy, falling unemployment, growing consumer confidence and continued low interest rates all appear to be boosting housing market demand.

Some experts have raised concerns that Government schemes such as Help to Buy are pushing house prices further out of some people's reach by fuelling strong demand in the market without the supply of properties for sale keeping up.

But Mr Noakes said there are factors which should help to keep a lid on house prices.

He said: "Continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices.

"We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms."

The Halifax figures also show that on a quarterly basis, prices are up by 2.1%. The quarterly measure tends to smooth out monthly volatility and is seen as a good indicator of underlying trends.

But Halifax said that despite the recent run of strong price increases, average values are still sitting at 10% below their 2007 peak.

The Bank of England base rate has been held at its historic 0.5% low for five years, which has had a devastating impact on returns for savers but has helped lenders to offer mortgage deals with ultra-low rates.

Analysis by financial information website Moneyfacts has found that someone with a 10% deposit taking out a two-year fixed mortgage deal could be more than £5,000 better off over the two-year period with the lowest rate currently on the market than they would have been in 2009.

Howard Archer, chief UK and European economist for IHS Global Insight, said the latest house price jump " can only fan concern that a house price bubble is developing".

He said: "While the strength of house prices is not yet a serious concern outside of London, it is something that needs to be closely monitored, given that a number of recent data and surveys have indicated that the strength in house prices is becoming more widespread."

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