According to the country’s largest building society, house prices rose by 0.6% in February and are up 9.4% on the same time last year.
The survey shows that the average property is now worth £177,846.
This is the 14th consecutive month house prices have risen and the pace is increasing, which will lead to the inevitable warnings that a further housing bubble is being created.
Why are house prices rising?
Experts attribute the sharp increase in house prices to a number of factors, including:
- Low interest rates, which no show no sign of increasing in 2014 after the Bank of England reviewed the ‘forward guidance’ policy
- The economic recovery, which has boosted consumer confidence
- Falling unemployment
- Government initiatives such as the Funding for Lending and Help to Buy schemes
Looking at other factors, Robert Gardener, Chief Economist at the Nationwide, said: “Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels, which was already insufficient to keep up with the pace of household formation. For example, in England around 109,500 new homes were built in 2013, this is 38% below the level recorded in 2007 and around half the projected number of households that are expected to form each year in the years ahead.” (Source: Nationwide)