House prices in the UK continued to firm strongly in February despite two interest rate increases from the Bank of England, a closely watched survey of the sector revealed today. Halifax found that house prices rose by 1.6pc in February from the previous month for a year-on-year increase. The standardised average house price in the UK, in seasonally-adjusted terms, now stands at STG148,089. The bank said the two rate rises to 4.0pc since November have had a "modest" impact on housing affordability, raising mortgage payments as a percentage of earnings from 13.9pc to 15.5pc.
"The proportion of mortgage payments to earnings however, remains well below the long-term average of 21pc," it said. The ongoing strength in the housing market is being attributed to a combination of a strong labour market, historically low interest rates and low mortgage payments in relation to earnings. The Bank of England is seeking to engineer a slowdown in the growth in the housing market for fear that a repeat that a credit crunch will occur that could possibly lead to a crash. ////www.fxcentre.com