Halifax: House prices up £11,000 since spring trough

Halifax: House prices up £11,000 since spring trough

Britain's biggest mortgage lender revealed today that house prices have risen by more than £11,000 in Britain since their trough in the spring following a sixth successive increase last month.

In its monthly snapshot of the housing market, the Halifax said the cost of a home rose by 1.2% in October and was 2.9% higher than at the turn of the year.

It released the figures as its parent bank, Lloyds Banking Group, said the worst was over for the UK economy. The chairman, Sir Win Bischoff, said: "The UK economy is now stabilising although we are far from having a rose-tinted view of prospects."

The data from the Halifax showed prices had risen by 7.1% since the spring, although the increase followed a 23% decline over the previous 20 months.

"Demand for houses has risen in recent months due to the very low level of interest rates, the decline in property prices since the summer of 2007 and a pick-up in consumer confidence on the back of better economic news", said Martin Ellis, the Halifax's housing economist.

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"Higher demand has combined with a low level of properties available for sale to result in rising housing prices over the past few months."

Britain's hard-pressed construction firms said today that a modest pick-up in housebuilding which has accompanied recent evidence of rising property prices was the one bright spot in another tough month for the sector.

A monthly Chartered Institute of Purchasing & Supply/Markit survey found that construction remained deep in recession last month, with activity dropping and fresh job losses. Residential building rose for a second month, but this was offset by further contractions in commercial property and civil engineering.

David Noble, the institute's chief executive, said: "These continue to be worrying times for the UK construction sector as firms struggle in the face of difficult market and economic conditions. The fact that the sector took another turn for the worse this month just highlights how fragile it still is."

Although Britain will be one of the last major developed economies out of recession, the European commission said today it would grow by 0.9% in 2010 - only slightly slower than Germany and France. Brussels said the UK would contract by a record 4.6% this year after six successive quarters of falling output.

"The EU economy is coming out of recession. This owes much to the ambitious measures taken by governments, central banks and the EU that have not only prevented a systemic meltdown but have kick-started the recovery," said Joaquín Almunia, commissioner for economic and monetary affairs. "However, the road ahead is a challenging one."

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