According to figures released by mortgage lender Halifax last month, UK house values have seen the largest rise since the credit crisis, which contrasts the growing opinion that the market may be slowing.
Q2 this year has seen an increase of over 10% compared to Q2 last year, which is the most sizable increase since September 2007.
Thoughts that the market might be slowing were fuelled by a 0.4% decrease in values for June, however July has seen values rise a further 1.4%, suggesting there is still a way to go before prices begin to level.
Since the Mortgage market review (MMR) changes were enforced in April, mortgage lenders have tightened criteria and implemented strict affordability checks that has seen the number of mortgage approvals decelerate, as potential borrowers are forced to wait weeks to see their bank’s advisor, and are then subject to hours of interviews before approval. It has been a feeling since last month’s decline in values, that these restrictions have slowed demand, but with record increases in July it appears house prices are increasing regardless.
Berenberg economist Rob Wood stated: “The housing market is shaking off new mortgage rules. This is important, as the Bank of England have recently been pointing to the housing market as a good reason for broader economic growth to slow".
Stephen Noakes of Halifax commented: “While supply remains low, housing demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates,"