Opinions of a potential bubble developing in the UK housing market differ greatly with every other economist close to housing.  The reason for the potential housing bubble is the rate of house price increase across the UK.  With the exception of London and the South East, the growth rate of prices in the UK is almost 6% for the last twelve months.  Price increases such as this are creating debate as to whether the UK could be facing a bubble or just a hyper-increase in house prices.

According to the Office for National Statistics, house prices increased more than 9% in the year to February.  In sharp contrast is the annual rate of 6.8% in January.

Although heavy increases in house prices have taken place over a year, more recent data indicates moderation setting in, according to lenders like Halifax and Nationwide.

The house prices of 2008 have already been surpassed by almost 4%, according to the ONS.  And London house prices continue to skyrocket.  The last twelve months have seen more than 17% increase in the capital city.

Oliver Atkinson with urbansalesandlettings.co.uk commented on the possibility of a bubble within the UK housing market, saying: "Forget talk of house price bubbles. In London, the market is well beyond that. What we're witnessing in the capital is a superbubble.”

The government is quick to talk down the hype regarding a potential bubble.

Housing Minister Kris Hopkins commented on the housing market, saying: "Mortgage lending activity in the housing market remains below the historic average and relative to earnings, median house prices across England are around the same level they were in 2005.”