House prices rose their fastest in 3 years

House prices rose their fastest in 3 years

British house prices rose at their fastest pace in nearly three years in May, a survey showed on Tuesday, as policies aimed at kick-starting the market attracted new buyers.


The balance has been in largely negative territory for the last three years, as the government's tough austerity measures, muted wage growth and difficult lending conditions have weighed on the housing market, with house prices still almost a fifth below their 2007 peak.


But new buyer enquiries were reaching 2009 levels last month, as schemes such as the Bank of England's Funding for Lending Scheme and the government's Help to Buy policy began to stimulate the market.


The Funding for Lending scheme, which launched last year, offers banks and building societies cheap finance to encourage them to lend more to households and businesses and has led to more affordable new mortgages.


The government's Help to Buy scheme commits funds to shared equity loans for new-build homes and from 2014 will guarantee mortgages, allowing buyers to purchase without large deposits.