Cheap money lifts UK house prices
UK house prices have risen at their fastest pace in 17 years.
Nationwide reports that UK house prices rose by 2.1% in April from the month before, the biggest jump since February 2004. Prices have gained 7.1% in the past year. The upswing should keep going, says Andrew Wishart of Capital Economics. Survey data from the Royal Institution of Chartered Surveyors shows strong sales and limited stock for sale. Web searches for homes hit a six-year high last month.
This has been a boom like no other, says Roger Bootle in The Daily Telegraph. House prices fell in real terms during the last four UK recessions. This time they have risen thanks to extensive government support and ultra-low interest rates. The ratio of average house prices to average earnings is now close to its 2007 high. Does that mean we are heading for a crash? Probably not. Households are finding mortgage payments manageable thanks to rock-bottom interest rates. A property slump looks unlikely before the Bank of England tightens the monetary screws.
The average house price was rising by £200 a day last month, notes The Observer. Signs of a strong UK recovery are to be welcomed, but it’s a shame it had to happen in the housing market. For all the talk of building back better, the government has instead served up a “bog-standard recovery built on cheap money, property speculation” and debt. Housing market growth “is the wrong sort of growth”.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Reeves ‘looks at minimum UK shareholding' in ISA reform
On top of a rumoured £10,000 cash ISA limit, chancellor Rachel Reeves is reportedly considering adding a minimum UK shareholding requirement to the stocks and shares ISA
-
Rightmove: Asking prices rise by 0.3%, but increase is lower than typical for October
October saw asking prices grow by £1,165 on average, Rightmove says, but the increase is far below the usual autumn bump as the property market braces for next month’s Budget.
-
Albert Einstein's first violin sells for £860,000 at auction
Albert Einstein left his first violin behind as he escaped Nazi Germany. Last week, it became the most expensive instrument not owned by a concert violinist
-
Who is Rob Granieri, the mysterious billionaire leader of Jane Street?
Profits at Jane Street have exploded, throwing billionaire Rob Granieri into the limelight. But it’s not just the firm’s success that is prompting scrutiny
-
Emerging markets boast top-quality growth stocks at bargain prices
Opinion Lim Wen Loong, investment director at Ashoka WhiteOak Capital, selects three growth stocks where he’d put his money
-
Beware the bubble in bitcoin treasury companies
Bitcoin treasury companies are no longer coining it. Short this one, says Matthew Partridge
-
Klarna leads a financial revolution – should investors buy?
Klarna has ambitions to rewire the global payments system and has huge growth potential
-
New faces don’t solve old problems – why strategy also matters when it comes to investment trusts
Opinion Changing managers often fails to boost a trust’s performance, says Max King
-
How to profit from silver’s record rise
Silver often lets investors down, but there may now be room for further gains, says Dominic Frisby
-
Are venture-capital trusts worth investing in?
Venture-capital trusts are a tax-efficient way to invest in early-stage companies. But are they worth the risk?