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UK property prices continue to increase steadily

UK property prices are still on the rise with a quarterly increase of 2.1% Help to Buy schemes could be responsible for boosting sales, with house prices increasing by 0.9% in July of this year. Prices in the three months running up to July 2013 were 4.6% higher than the same period last year. Prices have also risen on a yearly basis with the 4.6% rise since last year being the highest annual rise since 2010.

The average house price is now £169,624 and the total percentage of homes being bought was 6% higher in the first half of this year than it was last year. These figures indicate a significant improvement in the housing market in the UK and an improvement on the economy as a whole. The signs of improvement have also lead to a marked increase in the confidence of housing consumers in the property market which is likely to have boosted the demand for housing. Schemes such as the Funding for Lending and the Help to Buy scheme have also increased demand as they are helping lower mortgage rates and helping first time buyers get on the property ladder.

UK property prices are expected to rise gradually over the coming months but earnings are falling which may put a hold on any significant rise in market activity. There has been an increase in the number of mortgage approvals over the last year. Mortgage approvals were up 6% in the second quarter of 2013 when compared to the first quarter. However, there was a 1% fall in approvals between May and June according to data taken from the Bank of England.

Despite the rise in demand and the rise in market activity, supply of housing is still low and is not currently meeting the demand. The increase in sales has not been matched with an increase in supply and the number of unsold houses is much lower than it was last year. This indicates that, in order to keep increasing market activity, more housing may have to go on sale or more housing must be built.

As the market is tightening, there has been more pressure on house prices and sellers have been pushed to increase their asking prices. This gradual increase in house prices looks set to continue over the next few months. There has been an increase in the number of home owners making plans to sell which may help increase the supply in the next few months.

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