Bo­nanza as house prices hit new high

Sunday Express - - Front Page - By Mark Reynolds

THE av­er­age UK house price has hit an all-time high of £189,306, ac­cord­ing to fig­ures re­leased yes­ter­day.

And re­searchers at Na­tion­wide said the prop­erty boom shows no signs of cool­ing – a shot in the arm for home­own­ers.

The lender said homes in its own port­fo­lio rock­eted by 11 per cent year-on-year in Au­gust to reach the new av­er­age fig­ure.

It says prices rose by 0.8 per cent month-on­month, mean­ing yearly growth went over 10.6 per cent in July.

Typ­i­cal house prices first over­took their 2007 pre-crash peak in May.

Robert Gard­ner, Na­tion­wide chief econ­o­mist, said de­spite house price growth out­strip­ping earn­ings by “a wide mar­gin”, cheap mort­gage deals mean most monthly pay­ments as a share of take-home pay are af­ford­able.

How­ever, fears that the Bank of Eng­land will raise base rates above the his­toric 0.5 per cent low has prompted calls for bor­row­ers to plan for a rise in monthly mort­gage re­pay­ments.

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Mr Gard­ner be­lieves the mar­ket will con­tinue to grow in the mean­time, thanks to low in­fla­tion and ris­ing lev­els of em­ploy­ment.

He added: “The bright­en­ing economic out­look is likely to pro­vide sup­port for hous­ing de­mand.”

He pre­dicted the first in­crease in in­ter­est rates would come in the first quar­ter of 2015.

Guid­ance from the Bank of Eng­land, though, sug­gests any in­creases would be grad­ual and at a level “some­what be­low” those be­fore the fi­nan­cial cri­sis.

Land Reg­istry fig­ures, also out yes­ter­day, show av­er­age Lon­don prices are now more than two-and-a-half times those in Eng­land and Wales.

How­ever, across the coun­try, prop­erty val­ues last month had risen more steeply than any time in five years, it said.

All re­gions saw prices in­crease over the past year, from 19.3 per cent in Lon­don to two per cent in the North-east, where the av­er­age house price stands at £100,834.

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