8% UK House Price Inflation Predicted by Halifax

House prices will end 2014 between 4% and 8% higher than they start the year, according to predictions from the Halifax.

However, the lender says it’s “too early to talk of a housing bubble”.

Halifax has reported a 7% increase in prices in the first 11 months of 2013, which puts the average UK house price at £174,910 at the end of November.

An 8% increase would put the average property price at £188,903, still lower than the £199,612 peak recorded in August 2007.

Halifax’s chief economist Martin Ellis said: “Despite the recent gains, house prices remain 12% below their August 2007 peak, and transactions in 2013 are still around a third below the average for 2006 and 2007.

“House prices are also lower in relation to earnings, with the average price currently 4.8 times average annual earnings compared with a multiple of 5.8 in 2007. There is little sign of the excessive behaviour associated with a house price bubble at present.

“The authorities, primarily in the form of the Bank of England’s financial policy committee, are also on guard to implement measures to dampen the housing market should signs of overheating materialise.”

Halifax’s prediction is in line with other commentators who have suggested that a growing appetite for properties, boosted by an improving economy and government schemes like Help to Buy, will drive up prices in 2014 unless a large number of homes come on to the market.