House prices rose for the second month in a row in August according to lender Halifax, as the recovery in the battered property market continues.
The UK's longest running monthly survey of house prices revealed the average price had climbed by 0.8% last month, to £160,973, leaving homes costing slightly more than they did at the end of 2008.
While on a yearly basis they remain 10.1% lower, it represents a vast improvement from the low seen in April when they were down 17.7% annually.
Martin Ellis, Halifax's housing economist, said there had been a number of drivers of the recovery: 'Demand for housing has increased since the start of the year due to better affordability and low interest rates.
'This together with low levels of property available for sale, has boosted house prices over the last few months.'
The rise in price is the fourth one reported by Halifax this year, and part of the reason for the increase has been the improvement in affordability of mortgage payments.
Halifax said the typical mortgage payment for a new borrower was now down from a peak of 48% of average disposable earnings in the third quarter of 2007 to 29% in August.
However, this could well be affected when interest rates rise from current historic lows, and Halifax revealed the house price to earnings ratio - another indicator of how affordable property is - also crept up last month.
Having dipped as low as 4.25 times April, the house price to earnings ratio now stands at 4.39 times, it's highest level since February this year.
citywire.co.uk
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