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
-
The coming collapse in the jobs marketOpinion Once the Employment Bill becomes law, expect a full-scale collapse in hiring, says Matthew Lynn
-
Luana Lopes Lara: The ballerina who made a billionLuana Lopes Lara trained at the Bolshoi, but hung up her ballet shoes when she had the idea of setting up a business in the prediction markets. That paid off
-
Luana Lopes Lara: The ballerina who made a billion from prediction markets
Luana Lopes Lara trained at the Bolshoi, but hung up her ballet shoes when she had the idea of setting up a business in the prediction markets. That paid off
-
British blue chips offer investors reliable income and growthOpinion Ben Russon, portfolio manager and co-head UK equities, ClearBridge Investments, highlights three British blue chips where he'd put his money
-
Coreweave is on borrowed timeAI infrastructure firm Coreweave is heading for trouble and is absurdly pricey, says Matthew Partridge
-
Renewable energy funds are stuck between a ROC and a hard placeRenewable energy funds were hit hard by the government’s subsidy changes, but they have only themselves to blame for their failure to build trust with investors
-
Profit from document shredding with RestoreRestore operates in a niche, but essential market. The business has exciting potential over the coming years, says Rupert Hargreaves
-
The war dividend – how to invest in defence stocks as the world arms upWestern governments are back on a war footing. Investors should be prepared, too, says Jamie Ward
-
Literacy Capital: A trust where great returns fund a good causeThere’s plenty to like about specialist private-equity trust Literacy Capital, says Max King
-
An AI bust could hit private credit – could it cause a financial crisis?Opinion Private credit is playing a key role in funding data centres. It may be the first to take the hit if the AI boom ends, says Cris Sholto Heaton
