Rent Guarantee Insurance Comparison | London house prices outstrip 2007 peak with a 2.8% increase
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Nationwide figures show the average UK house now costs £164,630 with prices up by 0.8% on last year
Moving up: the average price of a house in London is now higher than the 2007 peak. Photograph: Linda Nylind for the Guardian Rent Guarantee Insurance Comparison
The average price of a house in London is now higher than in 2007, when the UK housing market was at its peak, according to figures from Nationwide building society.
They show prices across the country were unchanged in March, but up by 0.8% on the same period of 2012 – the first time since February 2012 that the annual rate of change has moved into positive territory.
The average price of a UK home is now £164,630 – almost £20,000 below the peak of £186,043 recorded in October 2007.
However, the society’s quarterly index showed that in London prices have bounced back to the levels seen before the banking crisis began to take its toll.
Between January and March the average price of a property in the capital increased by 2.8%, to £306,919. Prices are now 4.6% higher than in the first quarter of 2012.
Some areas of the capital have seen double-digit growth over the past year. According to Nationwide’s figures, Camden house prices are up by 15% year-on-year, while Hammersmith and Fulham, Newham and Southwark have recorded growth of more than 10%.Rent Guarantee Insurance Comparison
In contrast, prices in Scotland dipped by 4.9% over the year to an average of £128,594, and areas in the north of England have all experienced year-on-year price falls.
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The monthly stagnation in house prices comes despite some signs of life in the housing market earlier in the year, and the government’s attempts to inject money into the mortgage market through its Funding for Lending scheme, offering cut-price loans to banks and building societies.
Robert Gardner, Nationwide’s chief economist, said: “In recent months buyer demand has been supported by healthy rates of employment growth, as well as the Funding for Lending Scheme, which has helped to reduce mortgage costs and increase credit availability. At the same time, housing supply has remained relatively constrained.
“The outlook for the market is unusually uncertain, in part because the prospects for the wider economy are unclear, but also as the impact of a number of policy initiatives is hard to gauge.”
Commentators have suggested that house prices may be pushed up by one of the centrepiece policies in George Osborne’s recent budget, which was a plan to offer interest-free loans and guarantees to support £130bn of new mortgages from 2014.
The Office of Budget Responsibility warned the Help to Buy scheme could cause a housing bubble without increasing the supply of new properties.
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