House price fear for key workers

HOUSE prices will continue to rise in the next few years, says a new report. But areas outside the South-East will feel it the most, with steep increases coming in the Midlands and the North, particularly Yorkshire, as well as Scotland.

A price boom could put these areas out of reach to many young workers, and turn the Government's attempt to provide affordable housing to nurses and teachers into a crisis.

The report by property consultants FPD Savills said house prices outside London and the South East are starting to see a 'sudden acceleration'. This will hit family homes in the middle-to-lower end of the market.

The report raises fears that house prices will outstrip salary growth in areas that have so far been protected from the housing boom.

London house prices jumped by 150% in the past decade, pushing the average home to £184,000, while those in the North increased 40% to an average of £66,000.

Low interest rates would encourage buyers who cannot afford London and the South East to look elsewhere.

It predicts prices will rise by 18% this year, and by 8% next year, assuming moderate interest rate rises.