"The acceleration in house prices...will fuel concern that we could be on our way to a new housing bubble"
- Howard Archer, the chief UK economist with IHS Global Insight
There are two remarkable facts about the U.K. now- rapid pace of growth and emerging housing bubble. Both of them are results of government policies and schemes aimed at stronger private consumption and easy access to credit. However, more and more analysts believe risks looming from the property market may derail economic amelioration. Following these concerns, data from the major mortgage provider Nationwide showed that nation's house prices advanced 1% over the month to October, and soared 5.8% from the same period a year earlier. This is the largest annual gain since July 2010; however, the average price is still 7% below the 2007 peak. Latest data and reports are consistently showing increasing investors' interest, leading to a strengthening in housing market activity and pushing housing prices higher. Meanwhile, analysts believe house prices will see further solid gains over the coming months, and saying they can increase by about 8% in 2014. Also Thursday figures from the U.K. central bank showed the number of mortgage approvals soared to 66,735, hitting the highest since February 2008, and adding to signs of a rising demand for property. Following Thursday's data a senior economist from IHS Global Insight warned about the dangers of a house price bubble. He also stressed out the economy is currently some way off from an overall bubble; however, the government should act quickly in case the market becomes overheated.
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