A series of reports have all indicated strong house price growth in December, with the latest official figures showing price rises of 2.9 per cent compared to December 2004.
The latest Office of Deputy Prime Minister figures released this week adds to a body of evidence assembled by Nationwide, Hometrack, Rightmove, and the FT pointing towards an end of year bounce.
Prices rose 0.7 per cent compared to the month of November. First figures suggest that growth has continued, although more muted, in the first weeks of 2006.
“The pace of house price inflation on the government’s official house price measure has rebounded upwards, rising for the second consecutive month after October’s nine-year low,” said David Stubbs of the Royal Institute of Chartered Surveyors (Rics).
“These numbers confirm that the housing market has turned around since the weakness in the first half of 2005, other indicators have been suggesting this for a while” he added.
While the figures showed positive movement in the market, Howard Archer of economists Global Insight remained unconvinced that the increase was the start of a long term trend.
“While stronger housing market activity seems likely to put a floor under house prices, we remain sceptical that house prices will see sustained sharp rises over the coming months,” he said.
“We expect the upside for house prices to be contained by stretched affordability ratios on many measures, elevated debt levels and a further weakening in the labour market.”
The housing market has experienced a flurry of activity in recent months as homeowners have re-mortgaged in search of the best mortgage rate deal.
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