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House price inflation rises to 8.8%


House prices rose for the 13th consecutive month in January as annual inflation jumped to 8.8pc, according to the Nationwide building society.

First-time buyers are said to have contributed significantly to the rise in prices, as they returned to the market in force, leading to a total rise of 0.7pc in January alone.

The figures from the Nationwide are based on their own house price index, which is derived from mortgages approved by the society, and indicate the annual inflation on house prices is now as high as it has been since May 2010.

Despite the strong results however, there is still a great disparity between different areas of the UK, according to figures from the Land Registry. An example of this is a 17pc rise in prices in the London borough of Hackney year-on-year to December, while prices in Hartlepool fell by 6.6pc.

This led to Howard Gardner, chief UK economist at IHS Global Insight, to say: “The strong monthly rises reported by the Nationwide and the Land Registry will maintain concern that a new housing bubble could really develop in 2014, especially as the strength in house prices is spreading.

“At this stage though, only the pace of the house prices rises in London is really a serious cause for concern”, he continued.

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