UK House Prices Upward Trend Continues - Halifax

UK House prices rose 1.1% on average in July compared to June according to major UK lender the Halifax. This is the second monthly rise in the last 3 months, and the 3rd rise out of the first seven months of this year.

The tri-monthly measure of house prices also turned upward, with the rise of 0.8% being the first such growth since October 2007.

According to the Halifax house prices have now fallen just 0.8% this year so far, and are currently 12.1% lower than they were in the three months ending July last year. The Halifax index is therefore the most likely to show positive house price growth overall for 2009.

The report was also quick to highlight that homes are now just 4.36 times the average UK salary, but further down the report Halifax admits that it measures affordability based on its borrowers. This makes their affordability measure of little use; you cannot measure how affordable homes are using the people who have proven they can afford them.

Richard McKay director of private property sales portal Zungalow.com, and frequent commentator on house prices said:

It is lovely that houses are only just over 4 times the average salary, it's a shame it isn't true in reality. According to the Nationwide affordability index mortgage repayments were still over 100% of he average first time buyers salary in the final quarter of last year. This would have improved slightly in the first quarter of this year, but not sufficiently to end the correction, and now it will be getting worse again, preparing us for another correction."