UK house prices have first quarterly rise since bubble burst in 2007

UK house prices had their first three-month rise since October 2007 in a sign that the market may have found a bottom, according to the latest survey from Halifax. 

By Amy Wilson (Telegraph)
Published: 7:38AM BST 05 Aug 2009

Prices rose 0.8pc in the three months to July, compared with the previous three months, according to mortgage lender Halifax’s monthly survey. That is the first time prices have climbed on this quarterly basis since October 2007 and is “an indicator of the underlying trend,” Halifax said.

During July, prices climbed 1.1pc. However, prices in July were still 12.1pc lower than they were a year ago, with the average home costing £159,623. During the first seven months of 2009, prices have slipped 0.8pc.

“Demand for homes has risen, albeit from a very low base, since the start of the year, driven by improvements in affordability and low interest rates,” Martin Ellis, a housing economist at Halifax, said.

The price rise in July was the second in the past three months, and the third increase in the first seven months of 2009.

The house price-to-earnings ratio, a measure of affordability, is getting closer to its long-term average of 4, falling to 4.36 in July from a peak of 5.84 in July 2007.

Halifax is part of the Lloyds Banking Group, which reported a £4bn half-year loss this morning.

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