House prices between May and July are 4.6% higher than the same period last year, according to Halifax’s latest House Price Index.
Prices rose by 0.9% between June and July, the index revealed, marking the sixth consecutive month of house price increases. The average property is now valued at £169,624.
The number of sales has also increased following efforts by the government to rouse the housing market.
Almost half a million property sales took place during the first half of the year, representing a rise of 6% on the same period last year, during which the stamp duty holiday for first-time buyers came to a close.
Nationwide’s House Price Index, released last week, found a slightly lower monthly price increase of 0.8%, but a marginally higher average price of £170,825.
Martin Ellis, Halifax's housing economist, said that improved consumer confidence and schemes such as Funding for Lending and Help to Buy were "underpinning" an increase in housing demand.
"House prices are expected to continue to rise gradually through this year with only modest economic growth and still falling real earnings constraining housing demand and activity," he said.
Robert Gardner, chief economist at Nationwide Building Society, said growth during July provided further evidence of an upturn in the housing sector.
"House prices are currently around 12% higher than the lows seen in the midst of the financial crisis," he said.
"Signs of a modest improvement in wider economic conditions and further modest gains in employment are likely to be lifting buyer sentiment."
However, both acknowledged that supply is lagging behind demand, which is tightening conditions and contributing towards the upwards pressure on prices.
"The supply side of the market remains fairly constrained," Mr Gardner noted.
"The fact that rental growth has been consistently outstripping wage growth reinforces the notion that housing more generally remains in relatively short supply."
Keith McDonald
Which4U Editor
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