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UK House Prices Increase For Second Month, Halifax Says

UKHousePrices 040513

House prices in the UK increased for a second consecutive month in March and is likely to show a moderate upward trend all through the year, according to a report released by Halifax on Friday.

The house price index rose 0.2 percent month-on-month in March, following a 0.5 percent increase in February and a 0.3 percent fall in January. The rate of increase was weaker than the expected 0.3 percent rise.

"The housing market continues to show signs of modest improvement," housing economist Martin Ellis said. "We expect to see a modest increase in UK house prices during 2013."

Citing the latest industry-wide figures, Ellis noted that house sales continued to rise during March. At the same time, weak income growth and continuing below-trend economic growth are expected to remain significant constraints on housing demand during the remainder of this year, the economist added.

House prices in the first three months of 2013 were 1.2 percent higher than in the final three months of 2012. Prices were 1.1 percent higher than in the first three months of 2012.

Figures from the HM Revenue and Customs showed that home sales increased 5 percent between January and February on a seasonally adjusted basis. Sales were 10 percent higher than in February 2012.

A number of surveys have pointed to the favorable impact from the Bank of England's Funding for Lending Scheme, which has improved credit availability and has also helped to lower mortgage rates.

The government has also announced a package of measures to boost the housing sector, including a scheme that guarantees mortgage issuance of up to GBP 130 billion.

Citing data from the central bank, Halifax, however, noted that the number of mortgage approvals for house purchases fell 5 percent between January and February to its lowest level since September 2012.

The Nationwide Building Society said last month that house prices rose 0.8 percent year-on-year in March, recording the first annual increase in 13 months.

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