Annual house price growth now into double digits

The average price of a property now stands at £183,577 but Nationwide chief economist Robert Gardner warned that we could see a lull in activity.

He said: “The introduction of Mortgage Market Review measures could have an impact on activity levels in the months ahead as the new measures bed down.

“However, underlying demand is likely to remain robust, as mortgage rates remain close to all-time lows and as consumer confidence improves further on the back of stronger labour market conditions and the brighter economic outlook.”

With annual growth reaching double digits for first time since April 2010 Jonathan Samuels, chief executive of Dragonfly Property Finance, said the Index shows the markets progress.

He said: "Double digit annual house price growth for the first time in four years underlines how far the market has come.

"With the economy strengthening, unemployment falling and people generally feeling more confident and better off, the growth should continue.”

But Jeremy Duncombe, Director, Legal & General Mortgage Club, warned that growth must be kept sustainable moving forward.

Duncombe said: “According to Nationwide figures we have seen the first double digit rise in annual house prices since 2010.

“Whilst it is encouraging to see confidence return to the housing market, it is extremely important that house price growth is kept at sustainable levels or the market risks overheating.

“Prices in London have risen by 18% since the start of the year, far outstripping wage increases and the risk of a ‘bubble’ forming in the capital remains very real.

“A key part of controlling house price growth is to build more houses. Around 240,000 new homes need to be built each year to meet current levels of demand.

“More new homes mean prices are more likely to stay affordable. This has to be high on the agenda on all industry conversations about creating a sustainable housing market.”