UK House Prices Situation: Strong

UK House Prices Forecast: Continued Growth

Scotland's Booming

Data published this week by the Bank of Scotland shows that while Scotland remains the most affordable place to by a house in the UK, prices have increased by an average of 14.5% over the last year, compared to an average 8% in the UK as a whole.

The average price of a house in Scotland remains relatively low, at £122,511 - compared to a UK average of £179,425, but over the last five years, Scottish house prices have increased by 91%. However, Tim Crawford, the Bank of Scotland's chief economist, said that "House price growth north of the border is continuing to cool", and he expects that growth in 2006 will be limited to 10%, against a UK average of 5%.

Bad News For First-Time Buyers in London

A new report published this week by the London Housing Federation, who represent London's 400 housing associations, forecast that the average house price in the capital will reach nearly £400,000 by 2011.

The head of the LHF, Berwyn Kinsey, said that "London is facing a housing time bomb", as it becomes increasingly difficult for first-time buyers to get on the housing ladder. The average London home already costs nearly £300,000 - 8.8 times the average income in the capital (£33,373). This situation is continually worsening as house price inflation outstrips wage inflation for most workers in the capital.