House prices have risen 5.8% since October 2012, according to the latest house price index from Nationwide Building Society. This month, prices reached £173,678, meaning the average house value has risen over £9,500 in the past year.
Prices are now at their highest level since April 2008 and are only 7% below their October 2007 peak, when the average price of a home in the UK was £186,044.
Nationwide chief economist Robert Gardener says: “The risk is that if demand continues to strengthen while the supply of property remains constrained, affordability could become stretched.”
Legal & General Mortgage Club director Jeremy Duncombe says: “The latest figures on house prices from Nationwide will continue to encourage speculation that prices are rising too quickly. While it’s true that house price growth that significantly outpaces inflation is not good news if it persists over many months, it’s worth remembering how recently growth started and the position of the market only a few months ago.”