Yet more strong house price data emerged yesterday morning, this time from the Nationwide Building Society....
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div>Yet more strong house price data emerged yesterday morning, this time from the Nationwide Building Society.
While prices in June rose in all areas of the UK, averaging growth of 1 per cent (and 11.8 per cent annually), one or two figures stood out. You guessed it, the ones pertaining to London.
Annual house prices are now up by 26 per cent in London, bringing them to 30 per cent above the 2007 peak. This, you have to say, is mind-boggling. Forget orbit, London has entered another dimension.
However, despite the raft of big numbers announced by Nationwide, there is every reason to believe the market in the UK as a whole will slow in the months ahead. And that's probably for the better.
Mortgage approval numbers released by the Bank of England on Monday showed quite clearly that the Mortgage Market Review is having an effect.
It looks certain to slow the rate of growth in the near term, while the looming prospect of rate rises will also play a role.
When it does come, the interest rate up-cycle, however slow, moderate and protracted, will dampen demand. Rate rises, however negligible, have an immediate psychological impact. People sit up.
More generally, the rate of house price growth has ramped risk levels significantly in many areas of the UK, especially London and the South East. Buyers, whether landlords or owner occupiers, need to be more vigilant than ever.
The Bank of England also needs to be vigilant. The property market getting out of control is a genuine threat to the recovery of the economy. We're not on red alert, but it's fair to say that we're on amber alert.
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