Although this rise was slightly below the 2.1% quarterly increases recorded in June, July and August, housing demand continues to rise more quickly than supply, putting upward pressure on prices, said Halifax housing economist Martin Ellis.
‘Demand has increased against a background of low interest rates and higher consumer confidence underpinned by signs that the economy has begun a sustainable recovery. Official schemes, such as Funding for Lending and Help to Buy, also appear to have boosted housing demand,’ he explained.
He added that there are signs that supply is beginning to respond to the pick up in demand, which if continued should help to constrain the upward pressure on prices. ‘The recent strengthening in house prices is increasing the amount of equity that many home owners have in their home, enabling more to put their property on the market for sale. Levels of house building are also increasing, albeit from a very low base,’ he pointed out.
On a monthly basis prices were up 0.3%, taking the average price to £170,733, and the eighth successive monthly increase. But the average price in September was still 14% below the August 2007 market peak.
Jonathan Hopper, managing director of property finders Garrington, said the figures confirm that a sustainable recovery is heading in the right direction but the key will be more properties coming onto the market.
‘Our enquiries are up generally and in London and the South East specifically. We need the supply of property to keep pace with prices and demand. It is therefore good news that the Halifax has seen the number of home owners putting their properties on the market increase for the seventh successive month in August,’ he pointed out.
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