Price rises squeezing consumers out of the rental market

The price of buying a property in London is continuing to increase, according to new research.

Research published by Halifax revealed that the price of buying a home in the three months to February were 2.1 per cent higher than in the three months to November.

The UK lender also said the annual rate of price increase also rose again with prices in the three months to February 7.9 per cent higher than in the same period last year.

Its figures showed that house prices increased by 2.4 per cent in February, the eleventh monthly increase in the past 12 months, taking the average price to £179,872.

However, the findings showed that properties are still not as expensive as they were in 2007, when the prices were ten per cent higher than they are now.

Stephen Noakes, mortgages director at the Halifax said that improvements in the economy, falling unemployment, low interest rates and consumer confidence have contributed to the rising house prices.

Mr Noakes said: "However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices. We are also seeing signs of a revival in house building, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms."

The report also found that a constraint on property supply has been contributing to the higher cost of housing.

Similar findings published by Hometrack revealed that the average property rose by 0.7 per cent in January.

The rises were more pronounced in London with prices up 1.1 per cent in a month, followed by the south-east, which represents an increase of 0.9 per cent. 

Published 11th March, 2014

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