THE PRICE of an average house in the UK steamed past its previous nominal peak during August, reaching record levels again, according to Office for National Statistics (ONS) figures revealed yesterday.
The announcement came as Martin Weale, a member of the Bank of England’s rate-setting monetary policy committee (MPC), voiced his concern over the recent spike in housing market activity.
Speaking in front of the MPs on the Treasury Select Committee, Weale said he was concerned about the “buoyancy” of the market for residential property: “People who are taking mortgage debt need to be sure that they can afford to look after it even if interest rate return to what we regard as more normal levels.”
The ONS figures mirrored Weale’s concern, showing that house and flat prices increased by 3.8 per cent during the year to August, the fastest pace recorded in two and a half years, even before the start of the Help to Buy scheme’s second stage.
For first-time buyers, the increase was even faster, with prices rising 4.9 per cent over the same period.
The average house in the UK was worth £247,000 in August, but there are growing disparities between differ ent parts of the country. Of the UK’s four countries, only England’s average property prices have passed their precrisis peak in nominal terms.
However, English prices are largely fuelled by London and the south east, with every other region still below their 2008 peak levels.
In the capital, prices surged by 8.7 per cent during the year to August, and are now 16.9 per cent above their levels in January 2008, reaching an average of £437,000. David Newnes of LSL Property Services added: “Without pouring cold water on all the good news - it is essential that the upward momentum is also met head on by an increased supply of housing if we are to sustain growth in the long term and ensure future generations of homebuyers aren’t priced out.”