Funding for Lending Scheme buoys housing activity

The UK house prices increased marginally by 0.5% in February and by 1.9% in the three months to February, rising to reach £163,600, compared with prices in same quarter previous year, reports mortgage lender Halifax. The rise in February marks the fifth consecutive month without registering a fall. The latest data on the UK property market showed ‘evidence of improvement’ and a continued upward trend in housing sales. Halifax expects the UK house prices to scale higher in 2013. Earlier, Rightmove too reported a five-year high in February, with asking prices rising 2.8%.

The 1.9% increase in house prices from December 2012 to February 2013, compared to September 2012 to November 2012 was the third consecutive month there has been an increase in prices measured by this underlying trend. There was also a 1.9% increase in house prices from the three months ending in February 2013 compared to the same quarter a year ago. This was the second successive rise in this measure and was the biggest increase since September 2010.

Halifax says that house sales have gone up with Bank of England’s Funding for Lending Scheme (FLS) supported by increase in employment over the last 12 months. But weak economy and increasing pressure on household incomes is affecting demand for housing. According to Halifax, the FLS lowered mortgage rates even for those with small deposits and that this is improving the prospects for some would-be homeowners.

About Halifax house prices data, Jonathan Samuels, CEO, of Dragonfly Property Finance said, “Few will see this fairly upbeat reading by the Halifax as the beginning of a market recovery. If there are signs of recovery, those signs are certainly not applicable to all areas of the country. Average house prices may well finish the year higher than at the beginning but the data is likely to be skewed by the outperformance of the capital.”