House price growth 'fastest in a decade'
House prices are continuing to grow strongly and have registered their fastest monthly rise in over a decade.This is according to the latest Halifax house price index, which reveals that property prices increased by 3.9 per cent during May. The average price of a house in the UK now stands at £184,464, the data shows.House prices in the three months to May were two per cent higher than in the three months to February. The year-on-year rise for the three months to May was 8.7 per cent.Stephen Noakes, mortgages director at the Halifax, said: "On an annual basis housing demand is still strong and continues to be supported by a strengthening economic recovery. "Consumer confidence is being boosted by a rapidly improving labour market and low interest rates, although growth in average earnings still remains weak."Mr Noakes added that there are indications a revival in the housebuilding level will help to balance supply and demand and ease the upward pressure on prices. Private housing starts increased by 34 per cent in the year to March 2014, to 108,400.IHS Global Insight's Howard Archer described the increase as "a real bolt from the blue and at face value unsettling for policymakers".Earlier this week, Nationwide revealed house prices grew by 11.1 per cent during the past 12 months, putting the average value of a property at £186,512.News of soaring prices has fuelled speculation that the Bank of England may intervene in order to curb excessive rises, with the government's Help to Buy a potential target for policymakers hoping to avoid a housing bubble.However, Nationwide said the Help to Buy initiative is unlikely to have contributed to the recent price rises, attributing them to improving labour market conditions and a better economic outlook.The building society also said there may be signs of moderation in the housing market, as mortgage approvals in May were around 17 per cent below the level recorded in April.
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