A boom in house prices

A new house price boom is on the way, it emerged today, as figures revealed home loans worth £6.5 billion were signed off by high street banks last month, a 53 per cent increase on a year ago.

The British Bankers' Association said the number of approvals for house purchase - loans agreed but not yet made - was 78,521 in February, a 38 per cent rise.

Total approvals, which also take account of loans for remortgaging and equity withdrawal, numbered 184,200 with a value of £11.6 billion, up 17 per cent by number and 23 per cent by value on February last year.

BBA chief executive Ian Mullen said: "Affordable repayments to income ratios and sensible borrowing multiples suggest that the property market will hold up well."

Recent research by City investment bank Barclays Capital showed mortgage repayments account for only 14.8 per cent of the average Londoner's income, less than half the 35.6 per cent reached in the late-Eighties. According to home loans giant Halifax, property values are rising at an annual rate of 17 per cent - the fastest since the Eighties boom.

Meanwhile, new figures released today by the Office for National Statistics revealed that people living in west and central London are by far the best off in the country.

Residents of an area stretching from Hammersmith and Fulham in the west to the City of London, and taking in Westminster, Kensington and Chelsea, Wandsworth and Camden, had disposable incomes 64 per cent above the national average between 1997 and 1999.

? New car prices are still coming down, new figures published today showed,

Last month prices were, on average, 2.8 per cent lower than in February 2001, according to an index compiled by Alliance & Leicester bank.

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