The Halifax house price index increase of 4.6% is the fastest rise in the last three years.

For July itself prices were up by 0.9% and the three months to July was 4.6% with the average price of a property now at £169,624.

Even though economic growth is expected to be modest house prices are expected to continue to rise for the rest of the year.

For home movers the gap between their current home and the next increases which means they need a larger mortgage.

The Nationwide also had similar figures although these are calculated on a monthly basis and compared to the previous year whereas the Halifax compares the last three months compared to the previous year.

Government schemes having an impact

There is increasing demand for properties as government schemes such as Funding for Lending and Help to Buy is boosting confidence in the market.

Last year the government provided £80 billion to banks through the Funding for Lending Scheme for small businesses and homeowners. This has helped to reduce mortgage rates for first time buyers and remortgages.

In addition the popular Help to Buy Scheme where new buyers can have a smaller deposit with a capital loan from the government were also having an impact on raising demand.

However, the lack of growth in real earnings would mean there is a limit to the number of first time buyers that can afford significant rises in house prices.

Help with the deposit can come from family members as the equity release buyer can access cash using a lifetime mortgage and give to a child or grandchild.

Lack of properties on the market

There is a worrying lack of properties on the market, especially in London, with more buyers chasing a limited stock of properties compared to last year according to the Halifax.

London prices have also been rising with additional buyers from overseas such as Italy, Greece and the Middle east looking for safe havens and fuelling demand.

With competition from buyers and reduced supply of suitability properties for home movers, more remortgage buyers are remaining in their existing home and saving for a bigger deposit.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Learn more by using the mortgage cost calculators, equity release mortgage calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to maintain your standard of living as costs rise or help your children start or expand a business.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.