House prices rose by 0.6 per cent in February, a 9.4 per cent increase year-on-year, taking the annual rate of growth to the highest level in almost four years.
The latest figures put the average price of a home in the UK at £177,846, although this is still almost 5 per cent below the peak in 2007.
According to those who compiled the figures, sales and prices were being driven by record low interest rates, higher employment and the easier availability of mortgages, and it has been suggested prices could accelerate even faster in the coming months as more people bought a property for the first time with the aid of the Government’s Help to Buy scheme.
Since the second part of Help to Buy has been launched recently, it seems evident that even more people will be taking out mortgages for the first time, as the new “equity loan” element of the scheme means that people will be able to buy with very small deposits.
However, the rise in prices was also driven by the lack of availability of new homes, as housing completions are still well below pre-crisis levels. Only 109,500 new homes were built in England last year, 38 per cent below the level recorded in 2007 and about half the projected number of new households expected to form on an annual basis.
The hike in prices has also been particularly noticeable in London, where the average price of a property is now £345,186, almost double the national average.