Halifax shocks bears with rise in house prices

HOUSE prices rose for the second month running in August, mortgage lender Halifax said yesterday, confounding expectations for a fall though it still expected house prices to stagnate overall this year.

House prices rose 0.2 per cent in August, Halifax said, which, coming after a 0.7 per cent rise in July, had helped to reverse declines recorded between April and June.

That left prices 4.6 per cent up in the three months to August compared with a year ago and took the average price of a home to £167,953 -- nine per cent above its low in April 2009 but still 16 per cent down from a peak in August 2007.

Analysts had expected a fall of 0.5 per cent on the month, for a three-month annual rate of 4.4 per cent after rival mortgage lender Nationwide reported a 0.9 per cent drop in house prices in August.

Halifax economist Martin Ellis said that August’s rise still only left prices at a similar level to where they were at the end of 2009, and he expected house prices to remain static in 2010 as a whole. Housing market activity has been muted in recent months, with approvals hovering at less than half the level they reached at the peak of the housing market in 2007.