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Property market returns to growth, says Halifax

A lack of supply of homes has translated into rising housing market values according to the latest Halifax House Price Index.

The figures show that in the three months to June, prices in the UK rose 3.3% on the previous quarter. This followed two successive quarters of falls in the market.

Year-on-year, the second-quarter figures represented a 9.6% increase. The average house price in Britain is now £200,280, the bank said.

Martin Ellis, housing economist at Halifax, said: "House prices in the three months to June were 3.3% higher than in the preceding three months. This measure of the underlying rate of house price growth picked up following two successive falls. Annual house price growth also increased to 9.6% from 8.6% in May and is at its highest since September 2014.”

But Ellis said a lack of availability of homes for sale was the main reason for the rise in prices. 

“Supply remains very tight with the stock of homes available for sale currently at record low levels,” he said. “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015. Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.”

Jonathan Samuels, CEO of Dragonfly Property Finance, said: "The recent pick-up in demand the Halifax alludes to is almost certainly due to the General Election result. The Conservative majority was immediately viewed as a positive for the UK property market.

"With economic growth stronger than expected during the first quarter, a buoyant jobs market and people generally better off, you would expect the market to continue to improve throughout the rest of 2015, if at a more moderate rate compared to recent years.”

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