UK house prices surging despite new regulation
UK house prices rose at the fastest pace in seven years during July, up by more than a tenth, according to figures released by Halifax yesterday.
The bank said that house prices had risen by 10.2 per cent over the 12 month period. The figures fly in the face of others indices, which indicate that house price growth has slowed in recent months.
“The Halifax data adds to the current uncertainty over the true state of the housing market,” said Howard Archer of IHS Global Insight.
A new bundle of regulations which came into force at the end of April, known as the mortgage market review (MMR) are credited by analysts with slowing down house price growth. However, the Halifax index is rising at the fastest pace since September 2007.
Prices rose rapidly between June and July alone, according to the figures, up by 1.4 per cent.
Official figures released earlier this month also suggested that the frothy housing market had not been seriously affected by the MMR, with price growth continuing to accelerate into May, the first full month of the regulatory changes.
Despite the figures, Archer added that he still expected the market to slow: “We see house prices rising by around six per cent overall in 2015.”
Analysts have noted that the weakness in wage growth will continue to weigh against even faster house price growth, since buyers will not be able to match ever-increasing prices even when supply is short.