House prices increase at fastest pace in nearly three years, driven by accelerating prices in the capital

The average house price in the three months to June 2013 rose by 3.7 per cent to £167,984 compared to the three months to June 2012, according to the latest data from Halifax. This is the highest annual increase since August 2010.

Compared to the three months to March 2013 (first quarter), house prices in the second quarter were 2.1 per cent higher. Prices in June rose by 0.6 per cent in the fifth consecutive month of increases.

The Bank of England said yesterday that demand for mortgages is expected to increase over the next three months, and that the number of approvals for house purchases in May (58,200) was at its highest since December 2009.