House prices in the three months to August were 2.1% higher than in the previous three months; unchanged from both June and July.
Commenting, Martin Ellis, housing economist, said:
"House prices in the three months to August were 2.1% higher than in the previous three months;unchanged from both June and July. Prices in the three months to August were 5.4% higher than in the same three months last year, the highest annual rate since June 2010.
"Housing market activity is also on an upward trend with the number of mortgage approvals for house purchases — a leading indicator of completed house sales — 10% higher in the three months to July compared with the previous quarter after allowing for seasonal influences.
"Economic improvement and low interest rates, supported by official schemes such as Funding for Lending and Help to Buy, appear to have boosted housing demand in recent months. Nonetheless,relatively modest economic growth and below inflation rises in earnings are likely to act as a brake on the market. Overall, house prices are expected to rise gradually over the remainder of the year."
House prices in the latest three months (June-August) were 2.1% higher than in the preceding three months (March-May).
This was the same rate of increase as in both June and July.
Prices in the three months to August were 5.4% higher than in the same three months a year earlier. This was higher than July's 4.6% increase and is the highest annual rate since June 2010 (6.3%). The annual rate has picked up from 1.1% in March 2013.
House prices rose by 0.4% in August. This was the seventh consecutive monthly increase.
Activity has risen as well. The number of mortgage approvals for house purchases — a leading indicator of completed house sales — increased by 4% between June and July, to 60,600; the first time that approvals have exceeded 60,000 since early 2008. Approvals in the three months to July were 10% higher than in the preceding three months. (Source: Bank of England, seasonally-adjusted figures.)
The relatively low level of mortgage payments in relation to income is supporting housing demand. Typical mortgage payments for a new borrower - both first-time buyers and homemovers — at the long-term average loan to value ratio, accounted for 27% of disposable earnings in 2013 Quarter 2; its lowest proportion since 1999 Quarter 2 and comfortably below the average of 36% over the past 30 years.
More properties are coming on to the market. Whilst demand has increased more quickly than supply, surveyors have reported a rise in the number of homeowners providing instructions in each of the last six months, according to RICS. Further improvements in the availability of properties for sales could help to bring demand and supply into better balance, constraining the upward pressure on prices.