House prices soar 16.9% in year
THE house price boom continued its galloping pace last month, making it ever harder for people to get on to the property ladder, figures from the Halifax showed today.
Britain's biggest mortgage lender said prices soared 1.5% in February, to stand a staggering 16.9% higher than a year ago. The average British house now costs £101,980, it said.
The surging market makes it increasingly tough for young people to buy their first home. The average deposit required for first-time buyers across the country has risen from £6,000 in 1988 to more than £13,000 in 2001.
The headline figures for house price inflation will be noted by the Bank of England's monetary policy committee, which today decides the future level of interest rates.
Bank Governor Sir Edward George last week recognised that the buoyant housing market, itself created by the low interest rate environment, had gone a long way towards protecting Britain's economy from the global downturn in the past year. High house prices make people feel wealthier and more confident about their spending power.
The MPC is expected to leave rates on hold at 4% today, but it is likely to feel more worried about the strength of the housing market as the broader economy picks up later this year.
