Housing Market Confidence Boost Continues
As the growth in demand continues at a faster rate than the supply in the housing market, Halifax Housing Price Index reported an increase for the second consecutive month in August.
Halifax House Price Index recorded 0.8% monthly increase in August followed by the 1.2% rise in the previous month. The average price now stands at £160,973 – nearly the same level as December 2008. This narrowed the annual rate to -7.6% compared to 12 months ago. On the other hand, the survey found that the 3-month property value to August was still 10.1% lower than the figure showed in the same period last year.
Theoretically, the lack of supply and increasing demand in properties pushed the prices up recently. Greater demand in the housing is assumed to be affected by better affordability and low interest rates in the market since the start of the year; whilst the lack of availability is mainly affected by the general low property value influenced by the economic downturn.
Halifax also analysed the proportion of disposable income households devote to the mortgage repayment. The recent result revealed a significant fall over the past 21 month with the figure standing below the long term average level of 35%. The survey further illustrated that mortgage individuals now only spend 29% of their take-home pay to service their debts compared to the peak of 48% in autumn 2007.
The continuous positive news unfolded within the housing industry does not necessary bring hope to every individual. Despite the increase in house prices in the recent months, experts still suspect that the housing market would prone to relapse instead of the sustainable sharp upward trend illustrated in the latest house prices figures.