House prices are now rising at twice the pace of earnings after a resurgence in demand at the start of the year, new research today shows.
Prices rose 0.2 per cent – or £688 – in January, taking the average value of a property in England and Wales above £290,000, according to estate agents Reeds Rains and Your Move.
This means that over the year, property prices have risen by 5.5 per cent compared with a 2.1 per cent rise in average earnings.
Growth remains the fastest in the south east, at 7.7 per cent year-on-year followed by London, up 6.2 per cent.
The average property in London increased in value by £34,485 in the last year – almost equal to the £35,333 median gross annual earnings in the capital.
"We’re now passing these milestones in quicker and quicker succession, as prices pick up pace," Adrian Gill, director of Reeds Rains and Your Move, said.
"Existing homeowners have seen a satisfying New Year’s nudge in the value of their homes, making a positive start to 2016. While the 0.2 per cent rise may seem small, we’ve now broken through the £290,000 barrier in average home values across England and Wales. Last June, average prices crossed the £280,000 marker, but we have to go back to August 2014 for the crossing of the £270,000 threshold," he added.