The housing market continues to bring news that will no doubt keep in place the forecast for a rising standard base interest rate from the Bank of England.  According to the recent data released by Halifax, the average UK house price has increased in year to July by 10%.  This is the largest annual growth since the financial crisis began in 2007.  The average house price now stands at £186,000. 

In just over the past year the average UK house price increased by slightly over £17,000 to £186,322.  In July, the average house price rose by 1.4% which was an increase of close to £2,500, which essentially was a reversal of the slight 0.4% decrease recorded in June. 

Stephen Noakes, mortgages director at the Halifax, said, “Annually prices were 10.2% higher in the three months to July than in the same three months last.  While supply remains low, housing demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates. However, earnings growth is still lagging behind consumer price inflation.”

The rising average house price and strong demand in the housing market has led to an expectation of a sooner rather than later change by the Monetary Policy Committee to the long standing 0.5% interest rate.  Currently forecasts are set for the end of the year or early 2015.  Such warnings are due to strengthen demand for remortgage deals while interest rates are low and lending has not tightened.  Homeowners are likely to either take advantage of the market and sell their property while demand is high or seek a remortgage to ensure they have the best interest rate available from lenders before the cost of borrowing increases.