House prices surged by 6.5% over past year, Nationwide reports
Latest monthly increase of 0.6 per cent took average UK house values to £174,566
House prices are now rising at 6.5 per cent a year, marking the fastest annual increase seen in three years, according to figures by Nationwide.
The building society, which is the UK’s second largest mortgage lender, said that the average price of a house or flat in the UK is now £174, 566. Prices have been rising every month for the last year and are up from 5.8 per cent a month ago.
The annual increase is the strongest since July 2010, but Nationwide said prices are still around six per cent below an all-time high recorded in late 2007.
However, on a monthly basis, prices increased slightly slower than in October, when figures rose by one per cent in one month.
Yesterday, the Bank of England took the first step in putting the brakes on the surging property market with its decision to stop Funding for Lending (FLS) for household mortgages.
Governor Mark Carney said the FLS incentive was no longer needed amid rising house prices and, from January, it would instead be focused on business lending.
Under FLS, banks and building societies have been able to borrow money cheaply on the condition that they lend it out to individuals and businesses, and experts said yesterday that the move could spell the “beginning of the end” for ultra-cheap mortgage deals.
Fears of a looming property bubble have been growing in recent months amid a series of reports suggesting that demand in the housing market far outstrips the growth in the supply of homes.
Land Registry figures released yesterday showed that house prices in London were up by 8.7 per cent year-on-year in October. However, prices in the North East have dropped by 3.1 per cent in the same period.
Robert Gardner, Nationwide’s chief economist, said that that a large part of the uplift in the housing market is down to improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers.
He also highlighted the impact that low mortgage rates have had on borrowers' costs.
Mr Gardner said: "Mortgage rates have declined significantly from the already low levels prevailing last year.
"For example, Bank of England data indicates that the interest rate on two-year fixed-rate mortgages for those with a 10 per cent deposit has fallen from 5.6 per cent to 4.4 per cent over the past 12 months.
"For a buyer purchasing the typical UK home over 25 years, this equates to a reduction in monthly payments of around £110 (£1,320 per year) at the current average house price."
Additional reporting by PA
- 2 Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 The secret report that helps Israel hide facts
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Disney heiress Abigail disowns her share of family profits in West Bank company
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...