House prices are rising at their fastest rate since the run on Northern Rock in 2007 after a stellar July for the property market, lender Halifax said today.
The cost of the average UK property rose at an annual rate of 10.2% in the three months to July according to the bank’s latest house-price index after a faster-than-expected 1.4% surge last month alone.
The double-digit annual rise is the quickest since September 2007 when Northern Rock — eventually nationalised — was at the centre of the UK’s first bank run in over a century.
The increase — much stronger than registered by Nationwide — is sure to provoke more speculation of interest-rate rises from the Bank of England.
Threadneedle Street is using measures such as restricting high loan-to-income mortgages to cool the market as a first line of defence but loan approvals are recovering from a dip earlier this year.
Rob Wood, chief economist at Berenberg, said: “The housing market is shaking off new mortgage rules. This is important, as the BoE have recently been pointing to the housing market as a good reason for broader economic growth to slow. We look for house prices to gain 10% in 2014 and 2015.”
