House prices rise 1% in August, says Halifax |
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Thu, 07 Sep 2006 10:45
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LONDON: U.K. house prices recorded strong growth in August, according to data compiled by mortgage lender Halifax. Prices rose 1 per cent on the month, taking the average price of a home to 179,043 pounds.
This is a clear indication that the hike in interest rates effected by Bank of England at the beginning of August is not impacting the property market.
The prices were 8.2 per cent higher in the three months to August than a year ago, Halifax said.
The mortgage lender, however, said despite the stronger than anticipated data, there were signs that the increase is beginning to moderate in the coming months. It said the 8.2 per cent increase should be viewed against 9.4 per cent recorded in June.
Halifax's chief economist Martin Ellis said a number of developments are expected to constrain housing demand and moderate house price inflation over the rest of 2006. There could be growing pressure on household finances from higher utility bills and mortgage payments following the interest rake hike.
Ellis also pointed to the fact that August's increase was lower than the 1.4 per cent rise in August 2005. He, however, said the market is governed by sound fundamentals -- the economy is buoyant, consumer spending is growing and employment is rising.
Another lender, Nationwide had also reported strong house price growth in August. It had said house prices had risen by 0.8 per cent during the month.
The Bank of England is meeting Thursday to review the scenario, but economists widely believe it may leave the rates untouched at the current level of 4.75 per cent.
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Nationwide expects subdued growth for property market in 2006 