Halifax reports strong house price growth
By Sarah Witt
Published: September 7 2006 09:01 | Last updated: September 7 2006 09:01
UK house prices rose at a blistering rate in August, suggesting the Bank of England?s interest rate rise at the start of the month has so far done little to cool the property market.
Halifax, the country?s biggest mortgage lender, on Thursday said prices rose 1.0 per cent on the month, taking the average price of a home to £179,043.
However, the lender said that despite the stronger than expected data, there were signs that house price inflation was beginning to moderate. Annual house price growth eased to 8.2 per cent from 9.4 per cent in June, and this trend is expected to continue.
Martin Ellis, Halifax?s chief economist, said ?A number of developments are expected to constrain housing demand and moderate house price inflation over the remainder of 2006?. He pointed to growing pressure on household finances from increased utility bills and higher mortgage payments in the wake of the Bank of England?s August rate rise, as factors that would contribute to damping the market.
The Halifax data tally with figures published by rival lender Nationwide last week, which also reported a sharp rise in house price growth last month.
The Bank of England is expected by analysts to keep its main rate unchanged at 4.75 per cent after last month?s surprise quarter-point rise when the Monetary Policy Committee makes its monthly interest rate announcement later on Thursday. However, most believe the MPC will raise rates by another quarter point in November and Thursday?s house price data will reinforce this view.
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