While values fell 0.6 per cent in December, the first decline in 11 months, they increased 1.9 per cent in the fourth quarter, the mortgage unit of Lloyds Banking Group plc said in London yesterday. The average price in December was £173,467 (S$362,029).
"Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence," said Martin Ellis, a housing economist at Halifax. "This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand."
Mortgage approvals are at an almost six-year high amid a property-market revival in part fuelled by government incentives. The surge in housing activity has prompted the Bank of England to end incentives for home loans under its credit-boosting programme and officials have said that they are monitoring risks.
Nationwide Building Society said on Friday that values increased 1.4 per cent in December, taking their gain last year to 8.4 per cent, the biggest annual increase since 2006. As well as the economy and the government's Help-to-Buy programme, Nationwide said that "ultra-low" borrowing costs were fuelling demand for property.
The BOE's Monetary Policy Committee (MPC) has pledged to keep its key interest rate at a record-low 0.5 per cent until unemployment, now at 7.4 per cent, falls to 7 per cent. The MPC will leave the rate unchanged when it announces its next policy decision today at noon in London, according to a Bloomberg News survey. - Bloomberg
Source from Business Times