House prices are rising at their fastest rate since August 2010, according to an index published today.
The Halifax house price index found prices in the three months to July were
4.6pc higher than the same period in 2012.
The figures are yet more evidence that Government measures to stimulate the
property market are feeding through.
Prices lifted by 0.9pc month on month to reach £169,624 on average, marking
the sixth monthly rise in a row.
Martin Ellis, housing economist at Halifax, said: "Greater confidence is
likely to have underpinned the increase in housing demand. Official schemes,
such as the Funding for Lending Scheme and the Help to Buy equity loan
scheme, may also be raising demand.
"House prices are expected to continue to rise gradually through this
year with only modest economic growth and still falling real earnings
constraining housing demand and activity."
Halifax, the UK's biggest mortgage lender, registered a 6pc increase in sales in the first half of 2013, pitted against the same period last year.
This was not matched by higher supply, said Mr Ellis, leading to a fall in the number of unsold properties on the market and putting "modest upward pressure on house prices".
A year ago the Government gave banks access to £80bn of cheap capital to lend to homeowners and small businesses in the Funding for Lending Scheme. This has been credited with bringing mortgage rates lower and thus stimulating purchase and remortagage activity.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "While the number of transactions continues to rise and the Council of Mortgage Lenders also report that lending numbers are the strongest they have been since 2008, this will be a long, slow recovery. Much ground has been lost and transactions and lending levels are running at a fraction of what they were at the height of the housing boom.
"Government schemes such as Funding for Lending and Help to Buy are seeing a positive impact though, and we expect this to continue when the mortgage guarantee element of Help to Buy is introduced in January."