House prices in the UK have increased by 10.9 per cent in the last 12 months according to the latest reading of the market by Nationwide.
The bank, a major provider of mortgage loans in the UK, said that this is the fastest growth in price measured since June 2007 and the first annual double-digit increase seen since April 2010.
According to Nationwide’s data, UK home prices bottomed out in February 2009 at £147,746 ($273,938 CAD). Prices recovered modestly through 2009 and 2010, hitting £167,802 ($311,125 CAD) in April 2010 before declining again over the next two years.
The average price began climbing again consistently in early 2013 and is now close to its pre-crisis level, hitting £183,277 ($339,818 CAD) last month.
While Nationwide said that home prices have logged moderate growth through past several months, growth in April picked up markedly.
UK-wide price growth was, for the most part, a result of huge price increases in London and the South East region of the country.
“In the first quarter of 2014, prices in the capital were around 20 per cent higher than their pre-crisis levels, while in the UK as a whole prices were still around 2 per cent lower,” the Nationwide report said.
“Interestingly, price growth in London and the South East appears to be being driven by the top end of the market, with higher priced locations recording stronger price growth.”
A separate report released today by KPMG and Shelter, a housing charity group, said that house prices in England could double in 10 years to £446,000 if the country’s housing shortage is not addressed.
The report calls on the government to embark on several initiatives, including giving planning authorities the power to create “New Homes Zones” to encourage the development of new homes and help small home builders get back in the market by improving access to finance.
Home ownership in England has been falling for a decade and KPMG and Shelter warn that if the housing shortage is not dealt with, soaring home costs could leave more and more people priced out of the market.