Record RISE in house prices - values soar £1,500 a month
05-03-2014
HOUSE prices are rising at their fastest rate since 2007 as values soar by £1,500 a month, it was revealed yesterday.
By: Sarah O’Grady
Housing, UK, Britain, Prices, Falling, Rising, Nationwide, Mortgage, Families, Social Housing, Property Ladder, Conservative Government, Coalition, DaUnstoppable increase: House prices are growing at the quickest rate since 2007[GETTY]
Earnings growth is beginning to pick up, with wage increases finally outpacing the rise in the cost of living in February.
Robert Gardner, chief economist for Nationwide
Mortgages at a record low and the demand for homes outstripping supply sparked a 10.9 per cent increase in the year to April.
It pushed the value of an ordinary three-bedroomed semi-detached house to £183,577.
That is £3,313 up on March’s figure and a £17,991 rise in the past 12 months, said Britain’s biggest building society Nationwide.
The annual rate of inflation is the biggest since June 2007 – before the credit crunch – and has added £49 a day to values since April 2013.
Alex Gosling, of online estate agents Housesimple.co.uk, said: “A 10.9 per cent annual rise is a spectacular return to health for the housing market after the doldrums of years of flat prices.
“We haven’t talked about double digit house price growth since pre-recession times and there’s no evidence to suggest that prices won’t continue on their upward curve.
“What can we put this down to? Consumer confidence is back with a vengeance, buoyed by a stronger economy and improving jobs market.
“Even tougher mortgage affordability rules introduced this month are unlikely to dent that confidence.”
Other property experts pointed out that a massive demand from buyers for good-quality family homes was likely to carry on fuelling the market.
Jeremy Duncombe, a director of the Legal & General Mortgage Club, said: “Around 240,000 new homes need to be built each year to meet current levels of demand.”
Figures show price inflation in the South is particularly strong with an 18 per cent annual rise. The proportion of sales transactions in the region involving properties over £500,000 increased from 13 per cent in 2007 to around 25 per cent in 2013.
But Nationwide also warned that rising house prices are pushing properties further out of the reach of buyers.
“Earnings growth is beginning to pick up, with wage increases finally outpacing the rise in the cost of living in February,” said the company’s chief economist Robert Gardner.
“Nevertheless, house price growth is outstripping income growth by a wide margin.”