Business

House prices 'rose by 8.5%' in 2014, Halifax reports

Houses Image copyright PA
Image caption Average house prices rose by 8.5% in 2014, according to the mortgage lender Halifax.

UK house prices rose by an average of £16,000 - or 8.5% - in 2014, according to the mortgage lender Halifax.

The research, based on data from its own lending, suggests prices in Greenwich in south east London surged by almost 25%.

Policymakers have warned of the dangers of a housing bubble developing.

The government insists the Bank of England has the tools it needs to prevent such a problem.

The Halifax says the average UK home now costs £209,428, although data from other lenders and official sources differ.

It says nine out of the 10 areas with the biggest rises this year are in London.

The only place in the top ten not in the capital is Crawley, West Sussex.

'Improvements in the economy'

Outside southern England, property values in Sheffield underwent the biggest uplift, with a 13.7% rise.

Craig McKinlay, mortgage director at Halifax, said: "Continuing improvements in the economy, rising employment and low mortgage rates will no doubt have supported housing demand and, combined with a shortage of homes coming on to the market, will have contributed to rising property values."

At the other end of the table are towns and cities in the north of England, the West Midlands, Wales and Scotland.

Property prices in Bury, Greater Manchester, fell by 4.8%.

Area Annual increase
Top
Greenwich 24.6%
Ealing 24.5%
Crawley 22.4%
Tower Hamlets 22.0%
Kingston upon Thames 21.4%
Bottom
Bury -4.8%
Keighley -4.4%
Nuneaton -3.2%
Newport, Gwent -2.9%
Stoke on Trent -2.6%

"Several of the towns experiencing price falls in the past year are still suffering from relatively weak employment conditions, which may have had an adverse impact on their local housing markets," said Mr McKinlay.

Recently the Business Secretary Vince Cable warned of house prices "getting out of control".

The Bank of England governor Mark Carney told MPs in September that "we do need to be vigilant" on house prices.

Chancellor George Osborne has previously said the Bank of England has the powers to prevent a boom and bust in the housing market.

Data suggests increases in property prices have been slowing down over recent months.

Last week the Royal Institution of Chartered Surveyors predicted property prices across the UK would rise by an average of three per cent in 2015 with no growth in London.

More on this story