Britain's housing market shows no sign of cooling down, says Nationwide
Average price of a home in February is 9.4% higher than a year earlier, according to the latest figures from building society
Britain's buoyant housing market showed no signs of cooling in February with the average price of a home 9.4% higher than a year earlier according to Nationwide.
It was the strongest rate of annual growth since May 2010, driven higher by a 0.6% increase in prices on a monthly basis, a slightly slower pace than January's 0.8% rise.
UK house prices have now risen for 14 consecutive months on the building society's measure, with the average home carrying a price tag of £177,846 in February - the highest since April 2008, before the collapse of US investment bank Lehman Brothers which intensified the global financial crisis.
Robert Gardner, Nationwide's chief economist, said that the UK housing market was strengthening against an improved economic backdrop, low borrowing costs and a lack of properties on the market. He said: "Demand continues to be supported by record low interest rates, improved credit availability and rising consumer confidence thanks to the healthy gains in employment recorded in recent quarters.
"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."
Gardner said that in England, around 109,500 new homes were built in 2013, 38% below 2007 levels and around half the projected number of households that are expected to form annually in the years ahead.
House builders have reported sharp rises in profits over recent days, partly as a result of the government's Help to Buy scheme, aimed at helping people who cannot afford a big deposit to get a mortgage.
UK policy makers including the prime minister David Cameron have dismissed concerns from some commentators that Help to Buy might be feeding a housing bubble, arguing that average prices are still below their pre-crisis peak.
On Nationwide's measure, average UK house prices peaked at £186,044 in October 2007.