UK house prices hit record level

Written By Unknown on Selasa, 15 Oktober 2013 | 16.50

15 October 2013 Last updated at 05:43 ET

House prices across the whole of the UK have risen to a record level, according to the Office for National Statistics (ONS).

In August, the house price index stood at 185.8, surpassing its previous peak of 185.5 in January 2008 by 0.3%.

According to the ONS, the average price of a house or flat in the UK is now £247,000.

That is the highest figure since the index was first calculated in 1968.

The figures suggest that house prices are increasing in England, Wales and Northern Ireland, but still falling in Scotland.

Prices across the UK rose by 3.8% in the year to August 2013, up from 3.3% in July.

Bubble?

But other measures, including figures from the Halifax and Nationwide, show that house prices are still well below record levels.

Earlier this month, the Halifax reported that the average price of a house was £170,733, nearly £30,000 short of a peak in July 2007.

The number of transactions is also well below what it was at the height of the housing boom.

However, the news may add to concerns that the UK is once again in danger of a house price "bubble".

Continue reading the main story

Howard Archer, the chief UK economist of IHS Global Insight, said: "We are a long way off from an overall housing market bubble emerging."

However, he also warned that the government's controversial Help to Buy scheme could inflate prices significantly.

He is among economists who believe that house price inflation could hit 7% next year.

"There is a significant risk that house prices could really take off over the coming months, especially if already appreciably improving housing market activity and rising buyer interest is lifted markedly further by Help to Buy," he said.

The new deputy governor of the Bank of England, Sir Jon Cunliffe, has already tried to calm such fears.

"It doesn't look that we are in a bubble," he told MPs on Monday.

"In terms of whether it leads to households becoming overexposed, because they can borrow higher amounts, there is is a possibility it could do that, and that would create more of a risk," he told members of the Treasury Select Committee.


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