House prices rise at fastest rate since 2007

1 May 2014

House prices in the UK rose by 10.9% in the year to the end of April - the first double-digit annual price rise since April 2010 and the largest increase since June 2007, according to Nationwide Building Society.

It takes the average price of a home in the UK to £183,577, up 1.2% on March 2014, when the average home was worth £180,264.

The growth was, once again, mainly fuelled by London and the South East. In the first quarter of 2014, prices in the capital were around 20% higher than their pre-crisis levels, Nationwide said, while in the UK as a whole prices were still around 2% lower.

Robert Gardner, Nationwide's chief economist, said the pace of house price growth had “picked up" in April and wouldn't be hit by the new Mortgage Market Review (MMR) rules that require borrowers to supply far more details in order to secure a mortgage could dampen future growth.

He said: “Underlying demand is likely to remain robust, as mortgage rates remain close to all-time lows and as consumer confidence improves further on the back of stronger labour market conditions and the brighter economic outlook."

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Spectacular growth

Alex Gosling managing director, online estate agents, said the 10.9% increase was “spectacular". He added: "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.

"In fact, according to Nationwide's figures, the average price of a house has grown every month since January 2013, bar a minor blip in August 2013, rising from £162,245 to £183,577. That's an increase in average prices of 13.1% in 16 months."
He said prices were rising fast because consumer confidence is “back with a vengeance", buoyed by a stronger economy and improving jobs market.

However, he said the recent price rises have simply dragged many homeowners out of a negative equity position, and not into a position to move up the property ladder.

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