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House prices remain strong

The UK housing market 'remained strong' in June 2014 as prices rose 1% during the month, according to data collected by Nationwide.

The monthly housing survey found that prices increased by 11.8% in June 2014 compared to a year earlier, with all UK regions seeing price increases.

Key findings:

  • London prices recorded the biggest jump, rising by almost 26% in Q2 2014 compared to Q2 2013
  • prices on Scotland rose at the slowest rate, with increases of over 5.4% in Q2 2014 compared to Q2 2013
  • national house prices have risen above their 2007 peak
  • the average value of houses now stands at £188,903
  • prices in London are now 30% above their 2007 high.

Robert Gardner, chief economist at Nationwide, said:

"House prices recorded their fourteenth successive monthly increase in June, rising by 1%. As a result, the annual pace of growth picked up to 11.8% from 11.1% the previous month.

"In seasonally adjusted terms house prices reached their 2007 peak in Q2, just as UK economic output is likely to have surpassed the high water mark reached before the financial crisis.

"While all regions recorded annual price gains for the fourth quarter in a row, there is still significant variation across the UK, with the South of England continuing to record the strongest rates of growth. In particular, London continued to outperform, with prices up by almost 26% in Q2 compared to the same period of 2013."

The continued rise in house prices comes despite mortgage approvals falling to the lowest rate in nearly a year.

Recent Bank of England data showed approvals at an 11-month low, with 61,707 applications approved in May 2014, a drop of more than 1,000 from April 2014 and down from 75,901 in January 2014.