The latest House Price Index from Halifax found that, even though prices dipped by a marginal 0.6% during December, overall house prices rose by 7.5% in 2013 to finish the year at an average of £173,467.
This means average property prices rose by three times the rate of inflation, which increased by 2.1% in the 12 months from November 2012 to November 2013. Housing activity also improved during the year – in November the number of sales rose for the seventh successive month, while figures indicate that housing transactions are likely to have exceeded the one million mark for the first time since 2007.
These figures would indicate vastly improved confidence in the property sector over the last year, a sentiment that's been confirmed by another survey from Halifax. Their quarterly Housing Market Confidence Tracker, released last week, found that the number of people who think it'll be a good time to sell property in the next 12 months outweighed those who think it'll be bad for the first time since April 2011.
This returning confidence is thought to be largely fuelled by the rapid pace of the UK's economic recovery as a whole, with Help to Buy and improved mortgage availability being other key drivers. According to the latest Credit Conditions survey from the Bank of England, mortgage providers are becoming increasingly willing to lend at higher loan-to-values while default rates fell significantly during the year, meaning more people are getting (and staying) on the property ladder.
All signs seem to point to 2014 being equally as positive for the housing sector. Halifax economists forecast that prices will continue to increase over the next year, potentially between 4 and 8% by the end of 2014, but expect the issue of supply and demand to hopefully balance out to constrain excessive price rises.
"After years of stagnation the mortgage market is at last open for business thanks to the Government's flagship Help to Buy scheme. This will fuel the need for homes which will, in turn, increase property selling prices until we have enough new builds to satisfy demand."
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