House prices rise at fastest rate for six years

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HOUSE prices have risen at their fastest rate in more than six years amid further signs of a “burgeoning recovery” spreading across the country.

Prices recorded a 0.5 per cent month-on-month increase in September, marking the highest monthly increase seen since May 2007, property analysts Hometrack said.

More than two-fifths (41 per cent) of property markets registered higher prices across England and Wales in September, showing the broadest upturn
in prices seen since February 2007. One year ago, just six per cent of markets saw prices increase.

The report follows similar findings from Nationwide building society last week, which reported evidence that the market pick-up “is becoming increasingly broad-based”.

Fears have been raised that Government schemes to kick-start the housing market, such as Funding for Lending and Help to Buy, could be helping to stoke up a house price bubble, with people over-stretching themselves.

Mortgage availability has seen a sharp increase over the last year and the schemes have encouraged more low-deposit lending, which has fuelled demand from home buyers while the number of homes on the market has remained in relatively short supply.

Hometrack said that demand has been on the rise for eight months in a row. House prices remained flat month-on-month in the North East and Yorkshire and Humberside; they rose by 0.8 per cent in London.