Halifax House Prices Index at New Average Record High

Halifax has released its latest UK house prices index showing that the average price has hit a new high at £299,311.

House prices climbed by 0.3% in August but the annual rate of price rises slowed a little to 2.2% pa from 2.5% pa in the year to July.

Comment

House prices have been rising due to cuts in interest rates and a loosening of lending rules by the Bank of England allowing more lenders to offer a greater number of 95% loan to value mortgages as well as allowing higher loan to income multiples of up to 6 X.

The slowdown is equally no surprise given we have experienced interest rate cuts but inflation has been climbing prompting speculation that the Bank of England may hold interest rates at 4%pa for longer or even increase interest rates to curb inflation.

The average mortgage is now back over 5% pa again meaning a slowdown in prospective buyers.