HOUSE PRICES SOAR BY £ 18,000 A YEAR
Almost as much as the average pay packet
HOUSE prices soared by an average of £ 1,500 a month last year.
And experts predict that the boom will continue.
Properties rocketed in value by £ 18,000 – almost the typical British worker’s annual takehome pay.
The increase was fuelled by demand outstripping supply and interest rates pegged at record lows.
Figures showed a typical UK home was worth £ 288,000 last December – up from £ 270,000 12 months earlier and a rise of
6.7 per cent. The average UK worker earned almost £ 21,000 after tax last year – little more than the rise in the value of their house.
Experts said there was no sign of the housing boom slowing, with another six per cent increase in average values forecast this year.
It comes on the back of recent figures released by Halifax, the UK's largest mortgage lender, which showed annual prices rising by 9.5 per cent last year.
Howard Archer, chief UK and European Economist at IHS Global Insight, said: “We expect house prices to rise by around six per cent over 2016 amid healthy buyer interest.
“That could be fuelled by increased expectations that interest rates will not rise this year and a relative shortage of properties.
“Buyer interest seems likely to be supported by high and rising employment, decent consumer purchasing power, consumer confidence and very low mortgage interest rates.
“We also believe there will be some pick- up in earnings growth as 2016 progresses.”
Last December the Royal Institution of Chartered Surveyors said some regions could see property values grow by eight per cent in the coming year.
Paul Smee, director general of the Council of Mortgage Lenders, said improving economic conditions and schemes for first- time buyers like Help To Buy have helped fuel the price surge.
He said: “The market has seen a gradual upward trajectory and we'd expect this to continue.”
The boom was driven in part by sharp rises in London, eastern England and the South- east.
According to the Office of National Statistics, most of the capital's postcodes have average prices in excess of £ 500,000.
The cheapest property in England is the North- east, where the typical cost of a home is £ 155,000.
In Wales, house prices rose by just 1 per cent to an average of £ 175,000. And Scotland saw prices dip by 0.2 per cent to £ 193,000.
Figures from the Council of Mortgage Lenders showed lending to first- time buyers, home movers and buy- to- let investors at its highest levels since 2007.
But rising values make it tough for those trying to get on the housing ladder, with many young people facing a lifetime in expensive private renting.