Bonanza as house prices hit new high
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.
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.