I blogged earlier this week about the problems of the house market in London. I was interested to see some of the facts issued this week about how our house prices have changed in the last year.

The headlines from the Office for National statistics:

* UK house prices rose by 8% in the year to the end of March (the newspaper headline)
* The annual property price increase in London stood at 17%
* Excluding London and the South East of England, prices were up by 4.7%
* Prices in Northern Ireland increased by 0.3%, and by 0.8% in Scotland
* The average home is now worth £252,000

So, as always the statistical headline is a nonsense. An average of 8% doesn’t really apply – London is skewing the figures. The regions are rising – but at nowhere near the rate of the Capital and South-East. Northern Ireland was hit hard in the recession and hasn’t recovered.

One of the ‘big ideas’ to lam this all down is to increase the base rate. There is a rise on the horizon – but it is a relatively crude tool. In London it has potentially less effect as it is reckoned that 40% of purchases are in cash!

I don’t know what the answer is. I listened to a debate on Radio 4 where it was clear that the new tightened Mortgage lending rules are causing some issues. There are some anomalies when ‘computer says no’ to a number of people who clearly, on a common sense basis, should be suitable security for lending.

We have, of course, had an issue with building houses (the supply side). There were 112,630 houses completed in England in the last year, a rise of just 4% on the previous year. We are told that we need to build 250,000 homes a year to meet demand. More supply should, in theory, assist.

There is no simple and easy answer but there are different problems in the regions to those south of Watford! One size does not fit all…