House prices continue to rise

House prices are continuing to rise, the Halifax Bank has reported.

The Halifax reported that house prices increased by 1.4% in February, pushing the annual rate of house price inflation to 5.5%.

The average house price in the UK is now £173,498, the Halifax said.

Commenting on the figures, Martin Ellis, Chief Economist, said: "The combination of improving economic growth, low interest rates and high employment will continue to underpin a healthy level of housing demand over the next few months."

However, Mr Ellis said that a number of factors should constrain housing demand and prevent a significant and sustained acceleration in house price inflation this year.

In separate research, the Halifax found that rising energy and council tax bills increased the cost of owning a home by 7% last year.

Mr Ellis said: "The continuing high level of house prices in relation to earnings will curb the ability of many potential first-time buyers to enter the market.

"Council tax and utility bills increase of well above inflation in 2006 will also put downward pressure on householders' finances.

"Additionally, the weakening in the labour market should temper housing demand."


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