Peter Jackson column

Jan 4 2007 By Peter Jackson, The Journal

There are many traditions surrounding this time of year. We celebrate Christmas Day with the giving of presents and good food, we drink too much on New Year's Eve and the decorations come down later this week.

We also, of course, enter into a period of fevered speculation about which way house prices will go over the coming year.

And already, there's no shortage of statistics, reports and analyses for us to get our teeth into.

Land Registry data was published on Tuesday which can indicate a number of things, depending on who you read.

According to one report, a rise in English and Welsh house prices of 0.6% in November, giving a year-on-year rise of 6.8%, indicated a calmer market, but still a growth rate that "remains firmly positive".

Another write-up of the same report, however, makes great play of the fact that November's 6.8% marked a fall from October's 7% year-on-year rise and therefore the rise in house prices "eased off" towards the end of the year.

But, lest you take any consolation from this apparent cooling of an overheated market, I must point to the Nationwide building society, which claims UK house prices rose by 10.5% in 2006, with a 1.2% rise in December.

This means the average UK home is now worth £173,746 and it is worth £45 more every day. Which also means, providing your home is worth the national average, you can earn pretty close to the national average wage by doing nothing other than contemplating the appreciation of your bricks and mortar.

This has to be too good to be true.

So it would seem, according to yet another survey conducted for a national newspaper. This claims house prices are at their most overvalued for 15 years, with the increases in property prices accelerating far ahead of growth in incomes.

The survey uses an index of affordability that, it is claimed, show house prices to be more overvalued since any time since 1991 - which is a grimly significant year, because it's when the last housing bubble burst.

Which provides yet another reason for Gordon Brown to want to step into Tony Blair's shoes as soon as possible, and leave someone-else at Number 11 holding the housing boom baby.