House prices on the way up

House prices rose by 1.1% in July according to the latest Halifax House Price Index published today.

The underlying trend for house prices is also up with the 3 months to July showing an increase of 0.8% compared with the previous 3 months.

The average house price now stands at £159,623, down 12.1% on an annual basis.

Monthly mortgage repayments accounted for an estimated 21.4% of average gross income in July for existing borrowers.

This compares to an average of 20.4% and a peak of 26.9% in October 2008. It is the lowest proportion of income on mortgage repayments since mid 2004.

As RICS (Royal Institution of Chartered Surveyors) comments ‘With buyer interest still relatively strong and low levels of property coming onto the market, it seems more likely than not that prices may edge up further in the next few months.

But that doesn’t change the fact that the housing market, in terms of transactions, is still in a fairly depressed state.

Economic uncertainty, rising unemployment and continuing restrictions on mortgage finance could all pose significant headwinds to a longer term recovery in both activity and prices.’