Halifax figures support UK house price recovery

Figures released by the Halifax bank suggest that the steady recovery in the UK housing market is continuing.

The bank found that, while the actual price of houses in the UK remained static in October 2005 relative to September, there were signs of increased activity in the market, typified by an increase in the number of mortgage applications being approved by lenders. On an annual level, house prices in the UK were 3.9% up on a year ago, compared to 3% up in September. Halifax said that continuing economic growth, the high level of employment - which reached a record level of 28.76 million in the three months to August 2005 - and a boost to household sentiment regarding the future direction of interest rates following August's base rate cut are all supporting housing demand. This year's slowdown in the pace of UK economic growth and the ongoing historically high level of house prices relative to average earnings are, however, expected to curb the recent improvement in housing demand and prevent a marked pick-up in prices. Commenting, Martin Ellis, chief economist at the Halifax, noted: The overall pattern of price movements over the past few months shows that the market has strengthened compared with earlier in the year, but the static level of prices in October suggests that we are not poised for another sustained period of sharply rising property values.