House prices up by 1.6%, Halifax says

House prices rose by 1.6 per cent between March and April as the economy continued to pick up but new housing remained in short supply, according to Halifax.

The annualised rate of house prices went to 8.5 per cent, up from 8.1 in March. However, this was down from a 10.2 per cent peak in July 2014, Halifax said.

Martin Ellis, housing economist at Halifax, said: "Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates. At the same time, supply remains very tight with a general shortage of properties available for sale.

"This combination has kept house price inflation steady in recent months with prices increasing by 2.2-2.6 per cent on a quarterly basis and at an annual rate of 8-9 per cent."

Estate agents said the rise in prices had been exacerbated by the general election, which had generated worries over new taxes on owners of expensive homes proposed by Labour and the Liberal Democrats.

Jonathan Hopper, managing director of buying agent Garrington Property Finders, said the prime market in London had slowed to a standstill in recent months. "Many would-be sellers have chosen to wait and see who'd be in power, and this temporary lack of supply has artificially driven up prices."

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