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House prices rising at fastest rate for four years House prices rising at fastest rate for four years
(35 minutes later)
House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, according to the Nationwide Building Society.House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, according to the Nationwide Building Society.
The annual rate of growth is the fastest for almost four years.The annual rate of growth is the fastest for almost four years.
It puts the average price of a UK home at £177,846, which is still almost 5% below the 2007 peak.It puts the average price of a UK home at £177,846, which is still almost 5% below the 2007 peak.
The Nationwide said record low interest rates and growing consumer confidence were driving demand, with housing supply unable to keep up.The Nationwide said record low interest rates and growing consumer confidence were driving demand, with housing supply unable to keep up.
"Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels," said the Nationwide's chief economist, Robert Gardner."Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels," said the Nationwide's chief economist, Robert Gardner.
He added that just 109,500 new homes were built in England in 2013, which was 38% below the level recorded in 2007, and about half the projected number of new households expected to form each year.He added that just 109,500 new homes were built in England in 2013, which was 38% below the level recorded in 2007, and about half the projected number of new households expected to form each year.
London has again led the surge in prices. The Nationwide said house prices in the capital were almost twice those elsewhere. The Nationwide's figures are based on a sample of its own lending and they show that on its own measure, house prices across the UK have been rising for the past 14 months in a row.
It estimated the average London house was now valued at £345,186, almost double the average across the rest of the UK. London has again led the surge in prices. The building society said house prices in the capital, at £345,186, were almost twice those elsewhere in the UK.
The Nationwide figures come in the same week that UK house builders reported their profits had more than doubled. The precise level of house prices, and how fast they are rising, is a matter of some dispute. The numerous monthly surveys give quite different readings, though they are all recording a rise.
Barratt Developments on Thursday recorded a 162% rise in pre-tax profits to £120.4m for the six months to the end of December. For instance, the government's own house survey, published by the Office for National Statistics (ONS), said earlier this month that prices were only 5.5% higher than a year ago - but that they had already reached a record national average of £250,000.
Redrow's comparable figures revealed a 107% growth in profits to £47.5m. Help to Buy
Meanwhile, Persimmon said its profits jumped by more than 50% last year to £337.1m, thanks in part to the government's Help to Buy scheme. The Nationwide figures come in the same week that some UK housebuilders reported their profits had more than doubled, thanks to the past year's revival of activity and subsequent increased demand for new homes.
Barratt Developments on Thursday recorded a 162% rise in pre-tax profits to £120m for the six months to the end of December.
Redrow's comparable figures revealed a 107% growth in profits to £48m.
Meanwhile, Persimmon said its profits jumped by more than 50% last year to £337m, thanks in part to the government's Help to Buy scheme.
The government's own figures show that despite the attention being given to Help to Buy in the housebuilding industry, its "equity loan" element, launched in April last year, has so far financed only 15,000 completed house purchases in England.
However, there are more in the pipeline, and even more sales may yet be stimulated by the recently launched second part of Help to Buy, which offers a government guarantee against losses for lenders who are prepared to offer mortgages to people with only a small deposit.