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'Modest' upward trend in UK house prices predicted

PUBLISHED : Wednesday, 10 April, 2013, 12:00am
UPDATED : Wednesday, 10 April, 2013, 5:47am

British house prices rose last month, according to Halifax, which said values may continue on a "modest" upward trend this year.

Prices rose 0.2 per cent from the previous month to an average £163,943 (HK$1.95 million), the mortgage unit of Lloyds Banking Group said. From a year earlier, values were up 0.3 per cent.

Both the Bank of England and the government have introduced measures to support lending, while a Bank survey last week showed lenders increased the availability of mortgages in the first quarter. Still, mortgage approvals fell more than economists forecast in February, as a stagnating economy and turmoil in the euro zone hit confidence.

"Weak income growth and continuing below-trend economic growth are likely to remain significant constraints on housing demand during the remainder of this year," said Martin Ellis, a Halifax economist. "We expect to see a modest increase in UK house prices during 2013."

Chancellor of the Exchequer George Osborne pledged £3.5 billion in his budget last month to help homebuyers.

Recent house price data has been mixed. Nationwide Building Society said last week that the outlook for the housing market was "unusually uncertain" as prices remained little changed. But Hometrack said prices rose the most in three years.