UK home prices rise at fastest rate for five years

PUBLISHED : Wednesday, 12 March, 2014, 5:03am
UPDATED : Wednesday, 12 March, 2014, 6:23am

UK house-price growth accelerated in February to the fastest in almost five years as the economic recovery strengthened, boosting demand for property.

Values increased 2.4 per cent to an average £179,872 (HK$2.32 million), Halifax, a unit of Lloyds Banking Group, said. That's the largest monthly gain since May 2009. From a year earlier, prices rose 10 per cent.

Housing is benefiting from "the improved economic outlook, unemployment falling faster than expected, improvements in consumer confidence and low interest rates," said Stephen Noakes, mortgages director at Halifax.

A broadening recovery, government incentives and record-low interest rates have fuelled the property revival, with data this week showing mortgage approvals increased to the most since 2007. This has prompted the Bank of England to end its support for home loans and Chief Economist Spencer Dale said last week that officials were alert to the risk of overheating.

In the three months through February, home prices rose 2.1 per cent from the previous quarter. From a year earlier, values gained 7.9 per cent in the three months.

A shortage of homes for sale is "adding upward pressure on prices", Halifax said.