AFTER their worst slump for a generation, house prices in Britain are rising again. In the 12 months to January 2014, the value of homes increased by 6.8% across the country and by 13% in London, according to the Office for National Statistics. In the capital, where cash-rich buyers have viewed property as shelter from economic turmoil in the euro zone and elsewhere, prices are now at an all-time high after adjusting for inflation. In his old job at Canada’s central bank, Mark Carney, the boss of the Bank of England, was accused of presiding over a housing bubble. But since the crisis the bank has a bag of new tricks it can use to steady the market (see print article).

With base rates at an all-time low, mortgage repayments as a percentage of income are near their historic lows for first-time buyers, according to the Council for Mortgage Lenders, a trade association. That has allowed homeowners to borrow ever larger amounts of money from the banks. If real wages continue to stagnate across the country, they may struggle when interest rates eventually start to rise.

Explanation:

This interactive chart allows readers to compare the ups and downs of Britain’s 13 regional housing markets as measured by the Office for National Statistics. The data begin in 1968 for nine regions and countries, extending to 12 from 1992 onwards. As well as prices in nominal and real terms (deflated by the retail prices index), we have presented affordability measures for first-time buyers compiled by the Council for Mortgage Lenders. There are five different measures:

• House-price index: in nominal terms, rebased to 100 at the select base date. • Prices in real terms: the house-price index is deflated by retail prices and rebased at 100 to take account of the effects of inflation on purchasing power. • Mortage payments as % of income: first-time buyers’ median mortgage interest payments as % of income (at the time of housing completion).

http://www.economist.com/blogs/graphicdetail/2014/04/british-house-prices