Mortgage lender Halifax released figures today that reveal the fastest rise in UK house prices for three years, according to the Halifax House Price Index.
The survey shows that UK house prices in the three months to the end of June 2013 were 3.7% higher than in the same quarter of 2012, the fastest rate of increase since August 2010. The average UK house price is currently GBP167,984.
Martin Ellis, Halifax’s chief economist, commeted: “Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices.”
Government schemes to stimulate the market and increased buyer confidence appear to have driven demand for homes, with the Funding for Lending Scheme (FLS) helping to reduce mortgage rates and therefore boosting house sales.
Under the FLS, the Bank of England lends money to banks and building societies at cheaper rates on the understanding that they in turn lend it out to individuals and businesses.
The government also launched the Help to Buy scheme in April this year, which allows borrowers to take an equity loan from the government worth up to 20% of the price of a new house. This scheme is also believed to be stimulating the housing market as it can decrease the amount of deposit need to buy a new home.
UK house builders are also reportedly seeing significant improvements in the housing market, with more homes being built and trading said to be ahead of expectations.