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UK property prices up 0.4% in May, according to latest Halifax index

The latest house price index from the Halifax also shows that prices in the three months to May 2013 were 1.5% higher than in the preceding three months.

This is slightly higher than the 1.3% increase in the three month on three month measure in April. The average price is now £166,898.

Martin Ellis, housing economist at the Halifax, said that market activity has also improved slightly in recent months although home sales remain low by historical standards and the market is still sluggish overall.

‘Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity,’ explained Ellis.

However looking longer terms, prices in the three months to May were 2.6% higher than in the same three months a year earlier, the biggest increase since September 2010 when it was also 2.6%.

Meanwhile, a new poll shows that an overwhelming majority of Londoners believe that house prices in the capital will continue to rise, both in the short and long term, and by the most in upmarket Kensington and Chelsea.

Some 77% of people living in London say the average house price will rise over the next 12 months, and an even greater proportion, 83%, think house prices will go up over the next five years, according to the YouGov survey.

Asked what they think will happen to the average house price in their local area, and 74% of Londoners predict it will go up over the next 12 months, while 80% foresee house prices rising in their area over the next five years.

‘It doesn’t matter if you’re talking about the next year or the next five years, overwhelmingly Londoners believe that house prices will continue to rise in the capital, and that their own house will also increase in value. If house prices are a bubble, a lot of people are going to be caught by surprise when it bursts,’ said YouGov director of Political and Social Research, Joe Twyman.

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