Halifax reports 1.1% house price rise

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Halifax has reported a 1.1% rise in house prices in July, marking the second increase in the last three months and the third rise in the first seven months of 2009.

The lender’s more reliable three-month-on-three-month measure now shows prices up 0.8%, the first quarterly increase since October 2007.

However, over the first seven months of the year the average value of a UK home was down by 0.8%, to A?159,623, compared to A?160,861 in December 2008.

On an annual basis the fall stood at 12.1% in July but had eased back from minus 17.7% in April.

Affordability continues to improve with the house price to earnings ratio down to an estimated 4.36 last month, compared with a peak of 5.84 in July 2007 and a long-term average of 4.0

Halifax housing economist, Martin Ellis, observes: “So far this year, house prices have fallen by less than 1%. Demand for homes has risen, albeit from a very low base, since the start of the year, driven by improvements in affordability and low interest rates.”

He adds: “Higher demand has combined with the low levels of property available for sale to boost sales activity from exceptionally low levels and support prices over the past few months.”

By way of comparison, Nationwide recently reported its finding for July as follows: the average value of a UK home rose by 1.3% compared with June, to A?158,871.

The three-month-on-three-month rate of change saw a rise from 1.0% in June to 2.6% in July, the sharpest increase since February 2007.

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