House prices soar £700 a week

HOUSE prices have rocketed by more than £700 a week in some boom areas, Government figures reveal today. Price rises of more than £30,000 a year in property hot spots from London, to Dorset and Oxfordshire, have been identified by the Land Registry.

The increases are way ahead of the national average wage, put at around £24,000, suggesting owning a home in certain areas has - on paper - been far more lucrative than going to work.

At the same time the number of homes selling for more than £1m jumped by 36% in the three months of April to June, against the same period a year ago. The figures, which cover England and Wales, show a rise from 516 to 705, with once modest family homes in London and the South East selling for seven figures.

Sale values in Poole, Dorset, have surged £31,169 in the 12 months to June to an average of £172,405, while in Oxfordshire the increase has been a huge £38,114 to reach £204,167. Swindon has seen an increase of around £28,000, up to £135,085.

In Greater London, the average figure is up £27,000 to £232,830, although this disguises some spectacular rises. The average price in Kensington and Chelsea now stands at £629,021 - up £61,000 in a year and cementing the London borough as the most expensive place to buy in Britain. That contrasts with Merthyr Tydfil in Wales, where £629,021 would be enough to buy 15 average homes.

The Land Registry said prices were 13.5% higher during the three months to the end of June, against the same period a year ago. The increase lifted the average cost of a home by nearly £16,000 to £133,247.

East Anglia saw the biggest price rises for the second quarter running, with values surging by 19.8% to an average of £120,315. It was followed by the South West where prices rose 18.4% during the second quarter with the same period the previous year to £136,881.

The East Midlands saw prices grow by 15.9% to average £96,636, while in Wales they rose 15.1% to £79,397, and in the West Midlands they jumped 14.3% to £105,590. Yorkshire and Humberside experienced the slowest growth, 11.2% to £81,364, followed by the North at 11.7% to £73,444. Greater London prices increased by 13.1%, while for the South East in general it was 13.9%.

Although the Land Registry reveals a rise in sales of 'millionaire row' homes, Country Life said on Wednesday that it had seen a fall in the number of country houses advertised in the magazine. Surrey had the largest number of properties advertised, though the average price of homes for sale was £1.5m, down from £1.8m the previous year. Prices in Oxfordshire also averaged £1.5m, while in Buckinghamshire they were £ 1.4m, Berkshire £1.2m and in Gloucestershire £1.1m.

THE Bank of England signalled on Wednesday it was ready to cut interest rates. Mervyn King, the Bank's Deputy Governor, said it would take 'whatever action is necessary' to meet the inflationary target of 2.5%.

Three months ago the Bank was expected to increase rates from their 38-year low of 4% to cool spending. But the slower-than-expected recovery and stock market turmoil have reversed these predictions.

King's remarks come amid growing speculation that the US Federal Reserve is likely to cut interest rates. Analysts believe British rates could be reduced if further economic problems emerge.