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The BBC's Peter Morgan
"While demand outstrips supply, prices will keep on rising"
 real 28k

Wednesday, 24 November, 1999, 11:06 GMT
House prices continue rising
House price rises House prices have risen across England and Wales

The average price paid for homes in England and Wales has risen 12% in the past year, according to the Land Registry.

It is the fastest recorded increase since the index was established in 1996.

The figures - the most comprehensive measure of property prices - collate the price paid for every home sold in the three months of July, August and September.

Rise in past year
Gtr London: 16.8%
Sth West: 12.3%
Sth East: 11.4%
East Mids: 9.3%
North: 8.7%
West Mids: 8.6%
East Ang: 7.6%
Wales: 7.3%
Nth West: 7.1%
Yks & Hum: 6.6%

Because of the lag in getting these figures, the two 0.25% interest rate rises in September and November will not have had time to have their desired dampening effect.

The Bank of England cited concerns about the fast rise in property prices as one of the reasons behind its decision to raise rates.

The bank's view is that it could lead to a repeat of the damaging house price-fuelled boom of the late 1980s.

Outlook for higher rises

The danger, according to the central bank, was that people would be more willing to borrow and spend cash if they knew the price of their property had risen sharply.

The latest figures provide evidence that the rise in property prices has spread across England and Wales.

During the three months the average price paid rose by 5%, with the figure 12% higher than the same three months in 1998.

In London, the rise was more marked, with an annual increase in average property prices of 16.8%, with the volume of sales rising 16.46%.

The Land Registry figures reflect all purchases, including cash buyers which are not captured by other indices from home-loan lenders.

Nationwide, a leading UK mortgage lender, last month raised its forecast for house price rises to 11% from 8% for 1999 and to 9% from 6% for next year.

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See also:
02 Nov 99 |  Your Money
House prices 'booming'
13 Oct 99 |  The Economy
London house prices streets ahead
02 Sep 99 |  The Economy
House price rises hit 10-year high
04 Sep 99 |  The Economy
House prices 'could rise 35%'

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