British house prices rising at their fastest rate in 27 years

Figures confirmed that house prices increased by an average of 11.8% across the country.

16:26 02 July 2014

House prices in London have increased by a whopping 25.8per cent compared to last year. 

 

As of July 2014, an average home sells for more than £400,000 as confirmed by Nationwide. Meanwhile, the national average house price rose 11.8per cent to £188,903, which represents the biggest rise since January 2005. 

 

Robert Gardner, Nationwide's chief economist, said: "The price of a typical property in London reached the £400,000 mark for the first time, with prices in the capital now around 30 per cent above their 2007 highs and more than twice the level prevailing in the rest of the UK."

 

"Most major lenders are already using a stress rate in their affordability calculation that is broadly consistent with the new stress test. 

 

"Similarly, the proportion of house purchase loans at or above 4.5 times borrowers’ income is currently some way below the 15 per cent cap. 

 

"However, these policy measures, along with previous actions, such as the introduction of Mortgage Market Review (MMR) measures [tighter affordability checks], should help to limit the risk of house prices becoming detached from earnings without derailing the recovery in the wider housing market."