'Home a better investment than gold'

BRICKS and mortar have been a better bet than gold during the Queen's reign. The price of the average house has reached £102,886, more than 53 times the 1952 figure of £1,890.

The percentage increase is a startling 5,343%, while a three-bed semi in a South-East 'hotspot' has soared in value by a spectacular 14,600% over the same period. The price of gold, by contrast, has risen by only some 1,685% - marginally ahead of inflation - since the Queen came to the throne in 1952.

Both gold and property, however, have been outperformed by the Stock Market.

Overall, house prices have risen by about £5 a day over the last half-century, roughly £2,000 a year. Much of the increase has been concentrated, however, in the 25 years since the Silver Jubilee of 1977, following the Thatcher government's home-owning revolution. UK prices rose 8.5% a year over that period, while the figure for London was 10.1%.

Estate agents are now reporting a 'Golden Jubilee boom', with increases matching the highest seen at any time during the Queen's reign. Average prices have risen by £300 a week since last May, an annual rate of 17.9%.

While the rises have been good news for some, the latest figures raise serious fears of a repeat of the sharp downturn seen at the end of the 1980s.

Owning a home is becoming increasingly difficult or risky for first-time buyers, who are forced to take on massive mortgages. A survey earlier this week suggested one in four young homebuyers are concerned they may not be able to make their regular payments in the next four months.

To add to their worries, there are reports that the Bank of England's Monetary Policy Committee is about to push up interest rates from the current 38-year low of 4%. Such a move would be a deliberate attempt to make home loan repayments more expensive in the hope of cooling the property market.

Philip Shaw, chief economist at Investec Bank, said: 'Although the likelihood of a collapse as happened a decade ago seems low, the longer that prices rise sharply like this, the greater the risk of a sharp correction. The Bank of England may be faced with the choice of deflating the bubble gently or having to prick it.'

Nationwide's group economist Alex Bannister is forecasting further big price rises, however. He said: 'There has been no slackening in the demand for property in May. Record employment levels and low interest rates continue to underpin consumer confidence.'