UK house prices continue to accelerate in March
Updated : 08:55
Home prices in the UK rose at a brisk pace in March and were set to continue doing so, amid an ongoing lack of supply, one of the country's leading mortgage lenders said.
The annual rate of change for home prices increases increased from 9.7% in February to 10.1% in March, according to the Halifax home price index.
In comparison with the previous month, prices gained 2.6% to reach £214,811, following a fall of 1.5% in February.
Economists had pencilled in a rise of 0.9%.
“Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months.
“Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust," said Martin Ellis, Halifax housing economist.
Since 2008, prices for flats have risen more sharply than those for other types of property, Halifax said, rising by an average of 57.0% versus a 37.0% increase for all residential properties over the period.
Acting as a backdrop, Bloomberg reported on Thursday that institutional investors were being offered discounts of up to 20.0% for bulk purchases of residential properties.
"Admittedly, this strength undoubtedly partly reflects would-be buy-to-let and second home owners rushing to complete transactions before the 3% stamp duty surcharge on such purchases was introduced this month. But the low and falling level of mortgage rates, and recent improvements in the availability of credit, likely has been the underlying driver of the recovery.
"With the supply of homes coming on the market still muted, stronger demand look set to ensure house prices have strong upward momentum this year," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.