Average house prices in England and Wales have now returned to the levels recorded in Summer 2006, prior to the downturn.
This is according to new figures from the Land Registry, which suggest that the average cost of a home in these areas is now £166,072 – some 8.4 per cent up on the same period last year.
But the rate of growth seems to be slowing, with prices increasing by just 0.1 per cent between May and June. There were significant discrepancies between areas over the course of the year, with London seeing increases of 12.2 per cent but prices in the North East of England rising by just 0.7 per cent.
Transaction levels are also increasing, with HM Revenue and Customs reporting a 21 per cent rise between May and June in sales of properties with a value of more than £40,000. Some 86,000 properties were sold during this period.
But there are growing warnings of a second impending collapse in house prices. Predictions from the National Institute of Economic and Social Research (NIESR) claim that there could be a real terms fall in prices of as much as 8 per cent between now and 2015.
Fiscal tightening measures are expected to exert downward pressure on both prices and transaction levels, with increased public sector layoffs likely to persuade potential homebuyers against making a purchase.
