Housing market continuing to improve

The UK housing market is continuing to show signs of improvement, according to the latest survey from the Halifax.

House prices rose by 0.5% in February, it said, with property values now 1.9% higher than a year ago. The average property now costs £163,600.

Halifax also said housing sales had continued on a "modest upward trend".

While the Halifax predicts prices will rise over 2013, it says weak economic growth and pressure on household incomes will affect demand for housing.

The Halifax said house prices in the three months to February were up 1.9% from the previous quarter.

"This was the third successive increase in this measure of the underlying trend," said Halifax housing economist Martin Ellis.

"This increase in both house prices and activity in recent months is consistent with evidence of some improvement in market conditions.

"The more than half-a-million increase in the number of people in employment over the past year is likely to have been a factor supporting housing demand."

´Confused picture´
The Halifax data is more positive than recent reports from other lenders.

Last week, the latest survey from the Nationwide building society reported that house prices had risen by 0.2% in February, but were unchanged from a year earlier.

In February the Council of Mortgage Lenders (CML) reported that mortgage lending fell 3% between January 2012 and January 2013.

However, the CML said it expected some improvement in activity in the coming months, partly as a result of the government´s Funding for Lending Scheme (FLS).

The scheme has been widely credited for helping to reduce some mortgage rates.

This week the Bank of England reported a fall of £2.4bn in lending to individuals and businesses in the final quarter of 2012, but said the situation had improved significantly in January.

"The housing market presents a confused picture," said Mark Harris of mortgage broker SPF Private Clients.

"On the one hand, prices continue to rise on a monthly and quarterly basis, according to the Halifax, and on the other, lending fell in the final quarter of last year, according to the Bank of England."

While lenders are now cutting rates, most are still demanding big deposits for anyone wanting to take out a mortgage.

"We need to see some easing of criteria in order to make mortgages more accessible. This is surely the next move for lenders, many of whom tell us they have had enough of a rate war," said Mr Harris.

Source www.bbc.co.uk/news

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