Britain 'teetering on edge of dangerous housing bubble,' top Treasury official warns
By Piers Eady
The warning from Robert Chote, head of the Office for Budget Responsibility, comes after the average price of a UK home hit £254,000
Bubbly activity: Property prices are being inflated by speculators, according to Robert Chote
Britain is teetering on the edge of a dangerous housing bubble, a top Treasury official warned yesterday.
Robert Chote, head of the Office for Budget Responsibility, said property prices are being inflated by speculators hoping the market will rise even further.
Mr Chote told MPs: "With very rapid house price increases in some parts of the country you might see bubbly activity where people are willing to buy stuff off plan or not intend to live in it."
The average price of a UK home hit £254,000 in January, with London, the South East and Wales showing the biggest rises.
Average London homes rose 13.2 per cent to £458,000, while homes in the South East went up 7.1 per cent to £316,000 and those in Wales soared 6.9 per cent to £166,000.
It comes as Prince Charles warned rising house prices will drive a generation of young people out of London.
The prince said yesterday: "The National Housing Federation estimates that in only six years' time the average London house price will have risen 40 per cent to £650,000.
"This isn't sustainable and risks driving away talented young individuals who are starting their careers in London and spending most of their income on rent.
"Home ownership for this generation is seemingly becoming further and further out of reach."
With a typical price tag of £458,000 in London, house prices in the capital are now nearly 23 per cent higher than their 2008 pre-financial crisis peak, according to figures released this week by the Office for National Statistics.