House-price growth accelerated by 5 per cent in the UK in September, according to Nationwide, with London at an all-time high.
Bien Media client Nicholas Ayre, managing director of property finder Home Fusion, comments: “The 10 per cent double-digit growth in London house prices in the third quarter clearly illustrates that the capital’s housing market is outstripping the rest of the country. You have the London market and then you have everywhere else.
‘The gap between north and south has become more pronounced than ever even though prices rose in every region in the UK, suggesting the recovery is becoming more broad based.
‘It is no wonder that George Osborne is getting twitchy and giving the Bank of England powers to put the brakes on Help to Buy if it gets out of hands. Although fears of a house-price bubble are overstated, it’s important not to be complacent. A bubble implies that people are buying anything at any price and they aren’t but the fear is that if demand continues to surge at the levels we are seeing, this will start to happen. Potentially reducing the cap at which borrowers can buy under the second part of Help to Buy to less than £600,000 might make a lot of sense.
‘Despite the latest jump in house prices, this will be a long, slow recovery. Much ground has been lost and transactions and lending levels are running at a fraction of what they were at the height of the housing boom. The problem continues to be limited housing supply: not enough is being built, which results in rising prices. Domestic demand remains strong but some of the bigger schemes are also being driven by offshore demand, and this is pushing prices higher still.’