There is proof to show that the property market of Britain is regaining momentum with news that house prices have now increased in the last 6 months. The biggest mortgage lender of the world, HBOS, has released statistics that shows the house prices increased by 1 per cent to 171,632 pounds in the month of December.

It leads to a rise in the fourth quarter and an increase over the year. This is so because of the property market changes after a tough start in 2005.  The improvements were made after the benchmark interest rates were slashed a quarter of a point by the Bank of England. This step was taken to boost development in the economy that was increasing at its slowest rate.

The chief economists at HBOS, Martin Ellis, pointed out the stability of the economy was partly brought by the increased levels of employment. He quipped that an augmentation in the total employment of 326,000 since last year and the cut down in the interest rate in August had assisted in keeping the mortgage payments close to the average.  He observed that the cost of mortages is the same with the improvements noted by all the indicators of housing market activity over the recent months.  HBOS has also added to the optimism that was created by other recent reports.

There has been a prediction by Nationwide that the cost of the house will increase by 3 per cent while the RICS has predicted a 4 per cent augmentation in house rates in the next two years.  HBOS seems to be not too positive by cautioning that the housing market is thought to be flat this year. Experts are of the view that with a cut in interest rates in the near future, HBOS’ forecast is restrained even though the repurchase rate is to remain at lower than 5 per cent on January 12th.  Due to an improvement in the last seven months, there is an increase of activity amongst the property investors.