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Fears grow of British housing bubble

Published on May 13, 2014 2:17 PM

LONDON (AFP) - Home ownership is pursued almost as a right in Britain but the housing market has a history of boom and bust - and fears are growing of a new bubble.

The Bank of England, three former finance ministers and the Organisation for Economic Cooperation and Development (Oecd) have all raised concerns that rising prices could threaten Britain's economic recovery.

House prices across the country rose at 10.9 per cent in the year to April, the fastest rate for four years. In London, the increase was 18 per cent, according to Nationwide, Britain's leading mortgage provider.

The cost of a house in the capital is now 20 per cent higher than it was at their previous peak before the financial crisis in 2008 sent values tumbling, although the rest of the country has yet to regain pre-recession levels.

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