Struggling household finances to restrict house price growth
Although property prices rose yet again last month, the increasing pressure on household budgets will help top property values from surging too high, the mortgages director for Halifax claims.
In response to new research from the lender, Stephen Noakes explains wage rises are failing to keep up with inflation, which is causing many households to restrict their spending. This is an issue which is affecting households all over the country, but perhaps some regions more than others.
"We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms," he states.
For the moment, the housing market is showing no signs of slowing down though, as property prices rose by 2.4 per cent in February in comparison with the previous month, research from Halifax shows.
According to reuters.com, house prices only increased by 1.1 per cent in January, showing that the market has started to pick up after the typically slow Christmas period. This also means that values accelerated at the fastest monthly pace seen since 2009.
House prices are now 7.9 per cent higher than they were a year ago and the average UK property now costs £179,872, reports thecourier.co.uk.
However, despite worries that house prices are rising too quickly, Halifax notes that values are still ten per cent below their 2007 peak.