UK house prices are rising at their fastest rate for four years, according to the latest market analysis, which shows that values increased by almost ten per cent in February, compared with the same month last year.
Figures from Nationwide show that house prices have risen by 0.6 per cent in February, compared with the month before, which represents a sustained period of growth, though the most striking comparison is when this is measured against data from a year ago.
This month has seen a 9.4 per cent increase on the same period in 2013, with the annual rate of growth now the fastest for almost four years.
Overall, the increase means that the average price of a UK home is now £177,846, which is still almost five per cent below the 2007 peak, but is well on the way to catching up.
According to the analysis, sales and prices are being driven by record low interest rates, higher employment and the easier availability of mortgages, which are all combining to push prices higher.
Robert Gardner, chief economist at Nationwide, said it is entirely possible that prices will accelerate even faster in the coming months, as more people take the plunge and enter the housing market, or move up the property ladder.
Despite this, he dismissed speculation of a “housing bubble” being created, instead noting that the market is running smoothly.
“If you look at prices relative to earnings then housing does look relatively expensive by historic standards,” Mr Gardner explained.
“But if you look at how much it costs to service a typical mortgage, that suggests that housing isn’t overly expensive at this point… because interest rates are at such low levels.”
Another factor is the continued lack of new homes, with the analyst noting that the supply of housing remains “constrained”, with completions still well below their pre-crisis levels.
In 2013, just 109,500 new homes were built in England, which is 38 per cent below the level recorded in 2007, and about half the projected number of new households expected to form each year.
This suggests that there is still room for improvement in the industry, though the figures indicate that the sector is now truly on an upward curve.