UK house prices still accelerating, ONS says

House prices are 3.6% higher than their previous peak

The rate at which house prices are rising has continued to increase, according to official figures.

Prices across the UK rose by 9.1% in the year to February 2014, the Office for National Statistics (ONS) has reported.

That was a considerable jump from the annual rate of 6.8% in January.

More recent data from big lenders such as Nationwide and Halifax has showed house price growth moderating in the past couple of months.

The ONS said house prices in February were 3.6% higher than the pre-recession peak in 2008.

Prices in London rose by their fastest rate for nearly seven years. Over the last 12 months, the cost of houses in the capital increased by 17.7%, the highest inflation rate since July 2007.

Excluding London and the South East, prices rose by 5.8%.

Every nation in the UK saw a rise in prices over the last year, from 9.7% in England to 2.4% in Scotland.

Prices rose by 5.3% in Wales and 2.8% in Northern Ireland.

'Superbubble'

The news has once again prompted concern about a housing bubble, particularly in London.

"Forget talk of house price bubbles. In London, the market is well beyond that. What we're witnessing in the capital is a superbubble," said Oliver Atkinson of urbansalesandlettings.co.uk.

But the government was keen to play down such talk.

The Housing Minister, Kris Hopkins, said the amount of money being lent out in mortgages was still comparatively small.

"Mortgage lending activity in the housing market remains below the historic average and relative to earnings, median house prices across England are around the same level they were in 2005," he said.

More houses

The ONS figures also show that first-time buyers have been amongst those hardest hit by house price rises.

While the price of houses sold to first-timers rose by 10.5% in the year to February, those sold to everyone else rose by 8.6%.

Housing charity Shelter said the only solution was to build more houses.

"We need to see the government commit to concrete plans that will close the ever-expanding gap between the homes we have, and the homes we need," said Campbell Robb, Shelter's chief executive.

"This is the only way to put the brakes on our rollercoaster housing market, and give a generation of priced-out young people and families the chance of a stable home," he added.

In his March budget, Chancellor George Osborne announced plans for 15,000 new homes in Ebbsfleet in Kent.

He also extended part of the government's Help to Buy Scheme, which allows buyers to put down a deposit of just 5% on a new home.