House prices continue to RISE as would-be buyers hunt down their dream home

Values rose 5.1 per cent in the three months to February – higher than in the same period a year ago – and 1.7 per cent higher than the preceding quarter, said the Halifax. 

The cost of a typical three bedroom semi is now £219,949 – up £10,091 on the £209,858 price tag recorded in February 2016.

Russell Quirk, of online agents eMoove, said: “It would seem the cobwebs have been dusted off after the New Year hangover with these latest numbers showing the UK housing market remains resilient and is bouncing back after a seasonally slow start to 2017, reversing the downward trend seen last month.

“With prices having increased both annually and monthly, albeit only marginally, it is probable that we will continue to see the property market blossom as we enter into spring, in what is traditionally the busiest time of the year. 

“However, the continued growth of these numbers could hinge on tomorrow’s Budget announcements and whether or not the government decides to actually tackle the shortage of housing in the UK.

“If they do finally take a step in the right direction price growth could cool to a certain extent, as buyer thirst is quenched with an adequate level of housing stock, although this would be a slow process.”

Annual house price growth marked the smallest increase seen since a 4.6 per cent year-on-year rise in July 2013 and is now half the rate it was in March 2016 when it stood at 10 per cent.

Prices were up 0.1 per cent in February compared to January, ahead of January’s monthly revised 1.1 per cent drop but also softer than an expected 0.4 per cent rise.

The lender warned that house price growth would be curbed this year amid lower consumer spending power and a weaker labour market.

Martin Ellis, Halifax housing economist, said: “Housing demand is being supported by an economy that continues to perform well with employment still expanding. 

“Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices.

“The annual rate of house price growth has, however, nearly halved over the past 11 months and a sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home. 

“This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017.”