House prices are rising by 30.6% a year, the latest Halifax house price index reveals.
The figures record price growth of 4.7% for October – the fastest rate ever – and take the average price of a UK home to £122,377. HM Land Registry also confirmed an 18% surge in average prices in the year to September 2002. This takes the average price for England and Wales to £146,150. Volumes of sales have risen by 6.4% to 328,184 in 2002, from 308,323 for the same period in 2001.
Land Registry figures show the biggest jump in prices for East Anglia at 23.6% for the year. The South West and Midlands also enjoyed above 20% growth. Lowest growth was in the North at 13.8%, while prices in Greater London increased by 15%.
Meanwhile, the Halifax says borrowers are steering clear of the most expensive postcodes.
Martin Ellis, chief economist at Halifax, says: “Buyers are being put off buying in the most expensive areas and are increasingly looking to nearby areas for better value. This is causing prices to rise significantly in these areas.”
But despite the rises, affordability remains good. Ellis says: “Mortgage payments represent 15% of gross earnings for a typical new mortgage borrower, significantly below the long run average of 22%.”
John Wriglesworth, chief housing economist at Hometrack, adds: “The Halifax figures relate to the summer boom and completions that are only coming through now. The evidence from the ground is there has been a market slowdown in the last four to six weeks. Prices at the top end in the South East are falling. There is no crash in sight, but there is a return to more sustainable and moderate levels of growth.”