Britain’s house prices shot up again and there are two main reasons why —
mortgage approvals rose and property supply remains at a record low.
In other words, there are not enough houses to sate demand and for those competing to buy a place, more people are getting bank approval for a mortgage, meaning competition is tougher.
Lender Halifax said in its latest house price index report that property prices in the three months to December were 9.5% than the same period in the previous year. Between October to December, house prices were 1.6% higher than in the preceding three months.
Halifax says the average house price is now at £208,286. This is still lower than the latest data from the Office for National Statistics which showed that the average property price in Britain is at £287,000.
Halifax pointed out in its snapshot of the British housing market that the volume of mortgage approvals for house purchases — a leading indicator of completed house sales — increased by 1% between October and November. On top of that, Halifax highlighted from Bank of England figures that mortgage approvals were 16% higher than in the same three months a year earlier.
Worryingly, in tandem, supply fell again to a record low because new instructions by home sellers fell in November for the tenth successive month.
“There remains, however, a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale. This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices,” said Martin Ellis, Halifax housing economist.
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