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Warnings as house prices rise nearly 2% in February

The were more warnings from some experts today as house prices continued to rise at a rapid pace. Prices were up by nearly 2% in February with first time buyers having to pay nearly £19,000 more for a property than last year.

The latest figures were released by the Office For National Statistics (ONS) with many commentators now saying that we are in the grip of a “superbubble”. These comments were made as the ONS data showed that House prices in London rose by nearly 18% for the year. The data is based on property transactions where mortgages have been used. The data also shows that prices are now higher than their pre-crisis peak in January 2008.

The average cost of a home in London now stands at £458,000. Prices across the south-east of England rose by 8% and by 7% in the East of England. Sam Bowman who is the research director for the Adam Smith Institute said that it was devastating news and that the housing market is out of control and owning your own home is beyond the reach of most people. She went on to say that rising prices were great if you already owned your own home but most families were going to be trapped because they will not be able to afford to up size.

The figure from the ONS also showed that house price inflation had affected most parts of Britain but the increase were much more modest. Many areas are still below their pre-crisis levels. This is despite growth of 5% in Wales and 2.8% in Scotland and Northern Ireland.

The increases will be welcome in these other parts of Britain as homeowners look to sell their homes after being stuck for the last 5 years because of the recession. It now seems clear the the improving market has rippled out from London and the south-east and this will surely be welcomed as growing confidence and the government incentives is helping buyers get onto the housing ladder.