House prices in the UK were up by 0.1% in February, according to the latest house price index.
The Halifax house price index put the value of the average house in the UK at £219,949 in February; the small 0.1% rise in prices, following a 1.1% drop in January.
The index also reveals that mortgage affordability has improved in the past ten years, with the proportion of disposable income dedicated to mortgage payments improving by 18% since 2007.
In Q4 2016, typical mortgage payments at the historic average loan-to-value (LTV) ratio represented 30% of new borrowers’ earnings (both first-time buyers and homemovers). This compares to 48% of earnings during the peak of Q3 2007.
Martin Ellis, housing economist at Halifax, said: “House prices in the three months to February were 1.7% higher than in the previous quarter; down from 2.3% in January.
“The annual rate of growth fell to 5.1% from January’s 5.7 per cent, the lowest since July 2013.
“Housing demand is being supported by an economy that continues to perform well with employment still expanding. Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices.”
Jeremy Leaf, a North London estate agent, added:
“These figures are interesting as they slightly conflict with the Nationwide survey from a few days ago, although both show a housing market which is broadly stable with prices continuing to be supported by a lack of supply and low interest rates. This reflects what we are finding on the ground.
“‘Looking forward, activity does seem to have picked up a little since the slow start to the year and we hope the Chancellor doesn’t do anything to stop the market in its tracks tomorrow and in particular supports first-time buyer activity.”
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