House prices in the three months to March were up 10.1% on the same three months last year and were 2.9% higher in January to March than in the preceding three months, the latest housing index has revealed.
The latest Halifax House Price Index shows that the annual 10.1% house price rise recorded in the three months to March, was also higher than the 9.7% annual rise recorded in both January and February.
The annual rate has been within the 8–10% range for nearly the whole period since the start of 2015.
While house prices fell by 1.5% in February, this was more than offset by the 2.6% rise recorded between February and March this year.
Halifax’s report states that quarter on quarter change is a more reliable indicator of underlying trends as monthly house price changes can be more volatile.
Separate research from the Halifax shows that prices for flats have seen the greatest increase than any other property type since 2008.
The average price of a flat has risen by 57%, in comparison to a 37% overall rise for other residential properties over the same period.
Detached homes recorded the smallest rise at 20%, and terraced and semi-detached houses saw rises of 38% and 34% respectively.
Halifax’s report explains that the rapid increase in flat prices in London (62%) is behind the national rise in flat values.
In London flats represent a much greater share of the property market than elsewhere; half the capital’s sales (50%) are for flats as opposed to the UK average of 17%.
Halifax’s report also highlights HMRC’s findings that home sales have been rising, with a 5% increase recorded between January and February.
Sales in the three months to February were 4% higher than in the previous three months and 13% higher than in the same period a year earlier.
Furthermore, despite a slight dip (-0.3%) in February, mortgage approvals have also been on an upward trend.
Mortgage approvals for house purchases, which the report states is a leading indicator of completed house sales, were 4% higher in the three months from December to February, when compared to the previous three months, and were 19% up on the same period a year earlier.
However, while new instructions by home sellers increased for the third successive month in February (following ten monthly falls in a row) the rise was not enough to stop the stock of secondhand properties for sale decreasing.
The latest figures from the Royal Institute of Chartered Surveyors shows housing stock for sale at record low levels.
Martin Ellis, Halifax housing economist, said:
"House prices in the first three months of 2016 were 2.9% higher than in the final quarter of 2015. The annual rate has grown from 9.7% to 10.1% in March.
“Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months.
“Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust.”