UK house prices rise for second consecutive month in December

The UK house prices rose 1.3% in December, with the average price of a home reaching £163,845, marking the end of 2012 on a stable note, Halifax report said. The outlook for house prices in 2013 is likely to remain at the same level in 2013, the report said.

House prices rose 1.6% in November, while property prices in the three months to December were 0.3% lower than a year ago. The report noted that 2012 saw a six month rise in house prices and the prices fell for six months, as underlying prices remained little changed over the course of last year.

“Overall, last year saw an even mix of monthly rises and falls as prices lacked any real direction as both demand and supply pressures remained largely unchanged during 2012″, said Martin Ellis, housing economist at Halifax.

Most surveys showed that London and South east of England saw house price rises while regions elsewhere in the UK and Northern Ireland have seen house prices fall. The rise in house prices is being attributed to the Bank of England’s Funding for Lending scheme, which was launched in August 2012.

The Funding for lending scheme has now gained momentum and is now helping to increase the flow of money to borrowers and make mortgages more accessible. The Funding for Lending scheme aims to make available £60bn of cheap money to lenders, on condition that they in turn lend to households and companies outside the financial sector.

In November 2012, UK mortgage approvals reached 54,036, the highest since January 2012, an early indication that the Funding for Lending scheme is helping credit to flow into the economy, at least through home loans.