U.K. Home Prices Rise as Halifax Sees Modest Improvement

U.K. house prices rose in March, according to Halifax, which said values may continue on a “modest” upward trend this year.

Home values increased 0.2 percent from the previous month to an average 163,943 pounds ($249,500), the mortgage unit of Lloyds Banking Group Plc said in a statement in London today. From a year earlier, values were up 0.3 percent.

Both the Bank of England and the government have introduced measures to support lending, while a BOE survey this week showed that U.K. lenders increased the availability of mortgages in the first quarter. Still, mortgage approvals fell more than economists forecast in February, as a stagnating economy and turmoil in the euro area dented confidence.

“Weak income growth and continuing below-trend economic growth are likely to remain significant constraints on housing demand during the remainder of this year,” said Martin Ellis, a Halifax economist. “We expect to see a modest increase in U.K. house prices during 2013.”

House prices were 1.2 percent higher in the first quarter compared with the final three months of last year, according to today’s report.

Chancellor of the Exchequer George Osborne pledged 3.5 billion pounds in his budget last month to help home buyers. That followed the introduction last summer of the Funding for Lending Scheme, designed to spur banks to step up lending.

Recent house-price data have been mixed. Nationwide Building Society said last week that the outlook for the housing market was “unusually uncertain” as prices remained little changed in March. By contrast, Hometrack Ltd. said home values rose the most in three years.

The BOE kept the size of its bond-purchase program unchanged at 375 billion pounds yesterday and held its key interest rate at a record-low 0.5 percent.