Housing costs build in England

ENGLAND and Wales house prices rose 0.4% in October, matching the previous month’s gain, a survey of real estate agents showed.

The average cost of a home rose 0.4% to £145,900 (€246,900), according to property website Hometrack, which collects data from about 3,500 estate agents. In February, prices also rose 0.4%, a gain not exceeded since October 2002.

Strong house-price growth may encourage homeowners to keep borrowing after mortgage lending rose to a record in September. Some members of the Bank of England’s rate-setting committee, including Governor Mervyn King, have expressed concern about high debt levels.

“The housing market is heading for new heights,” said John Wrigglesworth, a Hometrack economist. “Expectations of rising interest rates are having very little adverse effect on housing demand with transactions continuing to rise across the whole country.”

The number and value of British mortgage loans approved in September surged from a year earlier to a record, the British Bankers’ Association said yesterday, suggesting the market is picking up pace.

Prices in London rose 0.3% in the month to £243,300, the slowest growth in the country, as some parts of the capital suffered price declines. In the East Midlands, including Nottingham and Leicester, the increase was 0.8%, the fastest nationally.