UK house prices surge to exceed all expectations
British house prices recorded their biggest annual rise since the start of the financial crisis last month, figures from mortgage lender Halifax showed, in news that casts doubt on other signs that the housing market is slowing.
House prices in the three months to July were 10.2pc higher than the same period a year ago, Halifax said, the largest annual increase since September 2007, the same month that there was a run on British lender Northern Rock.
July's annual rise was driven by a 1.4pc jump month-on-month jump in house prices, which followed a 0.4pc fall in June, and exceeded all forecasts in a Reuters poll of economists last week.
"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," said Rob Wood, UK economist at Berenberg. Since April British mortgage lenders have been required to conduct tighter credit checks on new borrowers, and in June the Bank of England limited how much most home-buyers could borrow in an effort to curb rising household debt levels. April's measures led to a fall in mortgage approvals, but it has been unclear if this would be temporary or permanent. Mortgage approvals began to rise again in June.