House price growth caught up with inflation again in August, hitting 2.6% annually, Halifax claims.

The lender’s latest House Price Index shows annual price growth rose from 2.1% in July with the average house price at £222,293.

Russell Galley, managing director of Halifax Community Bank, said: “Recent figures for mortgage approvals suggest some buoyancy may be returning, possibly on the back of strong recent employment growth, with the unemployment rate falling to a 42-year low.

“However, wage growth is still lagging increases in consumer prices, which is likely to add pressure on household finances and increase affordability challenges for some buyers.

“House prices should continue to be supported by low mortgage rates and a continuing shortage of properties for sale over the coming months.”

Commenting on the figures, Ewen Bunting, head of sales at independent estate agents James Pendleton, said: “The housing market is level pegging with inflation once again, as supply remains a major driver.

“It was only in July that inflation gained the upper hand. Home owners began to see the cost of everything they buy going up quicker than the price of their house, but this battle isn’t over yet.

“Nationally we’re now facing a year and a half straight of falling instructions.

“There just hasn’t been enough choice out there, and among those who simply need to buy and have the means, there’s no option but to meet seller demands.”

Source: Property Industry Eye