U.K. house prices rose for a sixth month in July and will continue to increase as an improving economy boosts confidence, according to a report by Halifax.
Home values increased 0.9 percent from the previous month to an average 169,624 pounds ($260,212), the mortgage unit of Lloyds Banking Group Plc said in a statement in London today. From a year earlier, prices rose 5.7 percent.
Today’s report adds to evidence that Britain’s property market is reviving as demand for homes picks up. Chancellor of the Exchequer George Osborne has introduced plans to increase mortgage availability, and the Bank of England has implemented a program to boost credit. Policy makers are also trying to guide investors that interest rates will stay low.
“Greater confidence is likely to have underpinned the increase in housing demand,” said Martin Ellis, housing economist at Halifax. “Official schemes, such as the Funding for Lending Scheme and the Help to Buy equity loan scheme, may also be raising demand. House prices are expected to continue to rise gradually through this year.”
Recent reports suggest Britain’s economy is continuing to gain momentum after expanding more than forecast in the second quarter, with surveys showing services, manufacturing and construction industries grew faster than forecast in July.
Osborne’s plan to guarantee riskier mortgages to boost growth, details of which were released last month, has drawn a warning from the International Monetary Fund for its potential to stoke home prices.
House purchases were 6 percent higher in the first half of 2013 than in the same period last year, today’s report showed.
Nationwide Building Society said on Aug. 2 that house prices rose to the highest level in five years last month.