Home Prices Grow in the U.K.

Home Prices Grow in the U.K.

Residential News » Europe Residential News Edition | By WPJ Staff | March 7, 2014 9:40 AM ET

Home prices in the U.K. grew by the fastest pace in almost five years due to an improved economic outlook and higher consumer confidence. 

Home values increased 2.4 percent to an average £179,872 ($301,000) in February, marking the largest monthly increase since May 2009, Bloomberg reports, citing data from Halifax, a unit of Lloyds Banking Group Plc. 

Compared to a year ago, prices increased 10 percent.

The housing market is reaping benefits from "the improved economic outlook, unemployment falling faster than expected, improvements in consumer confidence and low interest rates," Stephen Noakes, mortgages director at Halifax, said in a statement. "However, continuing pressures on household finances are expected to remain a constraint on the rate of growth of house prices."

A recovery in the U.K.'s property market has been fueled by government incentives and record-low interest rates, creating concern of the market's fast recovery pace.  

The report from Halifax shows home price increased 2.1 percent in the three months ending in February, compared to the previous quarter. Compared to a year ago, home values increased 7.9 percent during the same time period. 

The Bank of England issued 76,947 home loans in January, increasing from 72,798 the previous month, Bloomberg reports. 

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