House prices have rocketed past their 2007 peak to stand at an average of £188,903 across the UK in June, a new all-time high, Nationwide has reported.
According to the building society's House Price Index, prices rose 11.8% year-on-year across the UK in June, which is the biggest jump since January 2005. (See our Mortgages & House Buying section if you're hunting for a home.)
In London, property values leapt 25.8% over the year to over £400,000 on average, marking the highest growth rate in the capital since 1987. Prices in London now stand at 30% above their 2007 peak.
Last week, housing and homelessness charity Shelter said more than 80% of properties for sale in England were unaffordable for the average working family looking to buy their first home.
Prices rises across the UK
After London, Cambridge had the highest increase in house prices over the year to June, increasing by 20% to typically reach £419,187.
St Albans in Hertfordshire saw the third largest increase, with prices increasing by 18% to reach £451,800 on average.
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Newcastle saw the smallest rise, of 3%. A typical home there now costs £181,473.
In Wales, property prices are up by 9.3% on a year ago, now standing at £145,812 typically. While in Northern Ireland, where the housing market is still recovering from some sharp falls seen in the wake of the financial crisis, values have risen by 8.4% annually to reach about £117,150.
Curbs in riskier mortgage lending
Last week, the Bank of England revealed plans to curb riskier mortgage lending by announcing that loans of 4.5 times a borrower's income or higher should account for no more than 15% of new mortgages issued by lenders (see the Risky mortgage clampdown MSE News story).
The Bank also said lenders should apply a new "stress test" to make sure borrowers can keep up their repayments in the event of a rise of up to 3% in interest rates over the first five years of the loan.