House prices rise at £40 a day
SHAUN LOWTHORPE House prices in East Anglia are rising at the rate of more than £40 a day, new figures show.But while the increase is good news for existing homeowners and those looking to sell, there were fresh warnings of a danger of creating a society of housing 'haves' and 'have-nots' which threatened to deprive many the chance of getting on the property ladder.
House prices in East Anglia are rising at the rate of more than £40 a day, new figures showed last night.
But while the increase is good news for existing homeowners and those looking to sell, there were fresh warnings of a danger of creating a society of housing 'haves' and 'have-nots' which threatened to deprive many the chance of getting on the property ladder.
Nationally, the average UK house price has risen to £173,746 after prices grew by 10.5pc in the past 12 months, figures from the Nationwide Building Society revealed.
A strong economy, a huge influx of migrant workers - particularly from eastern Europe, increasingly flexible lending by mortgage companies and record City bonuses, all fuelled the boom.
And it predicted that in 2007 house prices would increase by between 5pc and 8pc, with annual inflation in double digits for the first few months of the year.
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The East of England matched the national increases, which were more than three times the rate of 2005, and defied predictions of a slowdown with average house prices around the £170,000 mark.
Fionnuala Earley, group economist at Nationwide, predicted that in the short term house prices would remain buoyant but that a cooling of the market could take place next year.
“There are still few signs that the rate of house price growth will moderate in the very short term,” she said. “Evidence from estate agents continues to show that supply conditions are tight with fewer sellers coming to market.
“We expect worsening affordability and recent interest rate hikes to affect the levels of activity in the market in the coming months. This will feed to a slower rate of house price growth in the second half of next year.'
Ms Earley added: “However, increasingly poor affordability, the impact of higher mortgage rates and the likelihood that fewer parents will be willing or able to help their children out will cause the rate of house price growth to move back into single digits in the latter part of the year.'
Richard Barker, product manager at Norwich and Peterborough Building Society said: “House prices in East Anglia have risen in alignment with the UK as a whole over 2006. The average house price in East Anglia now stands at around £170,000 which is marginally below that of the UK average. The annual growth of just under 10pc is virtually identical to the average increase for the UK.
“As far as the outlook for 2007 is concerned, interest rates are now at their highest levels for around five years and it's envisaged that they could rise further early in the new year, which could restrict growth in the housing market.
“However, economic factors continue to remain fairly sound, and, combined with housing supply constraints, it's anticipated that we should see house price growth at approximately the 5pc level.”
Norfolk estate agent Chris Hall, a past president of the National Association of Estate Agents, said the national average masked sharp regional disparities with most of the growth occurring in the South-East.
But he said the forecast for the region still looked promising, particularly around the Norwich area, though much would depend on interest rates, while it was unclear how the introduction of the new home inspection packs in June would affect supply.
“There is so much going for this part of East Anglia that you can't but feel confident about buying a house in this area,” he said. “The job front looks good and Norfolk has become slightly more accessible with regards to the A11, direct train services between Norwich and Cambridge and the introduction of Flybe flights.
“The confidence factor came back at the end of 2005 and it's been there for the majority of 2006.”
But David Orr, chief executive of the National Housing Federation, which represents more than 160 housing associations in the region, said the growth was pushing homeownership beyond the reach of many.
The federation's own research predicts that average house prices in the region will reach £285,000 by 2011 and he urged the Chancellor Gordon Brown to set aside more funds for affordable housebuilding in next year's comprehensive spending review.
“It's more evidence the country is facing a housing timebomb,” he said. “We need to increase the number of new homes being built particularly affordable housing for people on low to moderate incomes who are being priced out of the market while private sector rents are also high.”
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