House prices begin to boom everywhere

House Prices are rising at their fastest since the end of the last boom, growing by 1.2% in April alone, latest figures from the Nationwide show.homeins-img

According to the building society, the average price of a UK property now stands at £183,577.

The figures are at odds with those from the Land Registry, which said prices fell by 0.4% in the period to the end of March. The Land Registry collates the actual price at which a property eventually sells, as opposed to using the asking price.

Surging property market

However, it would appear this was a minor blip in a surging market, as the figures from the Nationwide and those most recently from Halifax show strong increases in prices.

The Halifax put house price inflation at 8.7%, so the indications are that the market is gaining a head of steam, and the ‘feel good factor’ is spreading out from London and the South East into the rest of the country.

Chief Economist at the Nationwide, Robert Gardner, certainly thinks that’s the case, saying “After several months of moderation, the pace of house price growth picked up in April, with prices rising by 1.2% during the month”.

The rise is being fuelled by a lack of properties coming on to the market, further increased appetite among buyers as economic confidence returns and a market being boosted by the continued Government Help to Buy scheme.

London deep in bubble territory

In London it seems that a bubble has truly inflated, with the data showing a rise of 5.3% for the first three months of the year and 18.2% over 12 months.

This means prices in the capital are now 20% above their pre-crisis, 2007 highs, and over the last couple of years have risen by nearly 40%.

Howard Archer, chief economist at IHS, told the Daily Telegraph “It’s certainly justifiable to talk of a house price bubble in London.”

Ripple effect across UK

And while prices in the rest of the UK are actually still 2% below the 2007 peak, it would appear the ‘ripple’ effect, whereby rising prices spread from London through the rest of the country, is now beginning.

But commentators report still lower than average levels of activity in the regions and prices which aren’t nearly as overstretched as in London in relation to earnings and long term average price trends.

Fair wind behind property market

Yet it seems there is now a fair wind behind the property market in nearly the whole of the country. Nationwide’s Gardner added “underlying demand is likely to remain robust, as mortgage rates remain close to all-time lows, and as consumer confidence improves further”. Additionally, continued historically low mortgage rates are only encouraging buyers still further.

In the longer-term, nearly all analysts expect prices to continue to rise well above inflation and average earnings, causing problems for first-time buyers and even middle-income families.

Average price of a home £446,000 in 20 years?

A report by the accounting firm KPMG, and one from the housing charity Shelter, suggested the average price of a home could rise to a staggering £446,000 by 2024.

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About James

James is a journalist and digital editor with over 13 years’ experience writing and editing for media and finance businesses. He specialises in personal finance and economics, but also covers property, travel and news.

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