Low mortgage rates responsible for housing price rise

07/01/2010

The continuing rise in house prices could be due to low mortgage rates, Halifax has suggested.

Housing prices rose by one per cent in December, the sixth successive month of increase.

Martin Ellis, housing economist at Halifax, commented: "The one per cent rise between November and December was slightly below the average increase over the previous five months."

He added: "The significant cut in interest rates following the worldwide financial upheaval in the autumn of 2008 has markedly reduced the burden of servicing a mortgage for many households".

Improvement in the labour market, including the recent increase in construction figures, has also been mentioned in line with the rise in demand for property.

In December 2009, monthly mortgage repayments made up 23 per cent of average gross household income.

This compares to a high of 27 per cent in October 2008.

Tags; Housing Debt and Bills,

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