Housebuilding revival eases fears of property bubble

Reviving housebuilding activity should eventually curb the recent surge in property prices and quell fears of a bubble, lender Halifax said today.

The bank’s latest house price index showed prices up 8.7% on last year in May after a sharp 3.9% rise over the month, taking the average price to £184,464.

Halifax however pointed to a recovery in building work, after the number of private housing starts jumped 34% to 108,400 in the year to March.

Mortgages director Stephen Noakes said: “There are signs of a revival in housebuilding which should bring supply and demand into better balance.”