House prices in Kingston and Richmond have soared by more than 14 per cent over the last year, despite fears of a market collapse.

A survey published by the Nationwide Building Society this week showed that the average two bedroom semi-detached house now fetches more than £200,000 and prices are continuing to rise.

The housing boom is pricing many first-time buyers out of the market. Prospective buyers now need to earn in excess of £50,000 if they are to get a foot on the property ladder.

Although the market shows no immediate signs of slowing down, estate agents say there are notable signs of a shift towards a buyers' market.

A spokesman for the Surbiton branch of estate agents Bradford and Bingley, Gascoigne Pees, said: "People have stopped looking at properties because they were afraid the prices were going up too much.

"Every month the prices are going up gradually by an average of two per cent, but by September the prices will have levelled out," he added.

Teddington has seen one of the biggest increase in house prices sparked by a shortage of affordable houses for sale.

Twickenham MP Vincent Cable expressed concerns about the impact of the price rises on buyers who were over-stretching themselves in order to purchase a home.

He said: "This is good news for residents who are able to realise the greatly improved value of their property by moving somewhere cheaper; but bad news for almost everyone else.

"It is virtually impossible for people on moderate incomes to be a first-time buyer in the area. The demand for high-income housing is adding to pressures from developers to acquire and build on every scrap of land they can get their hands on.

"And if the market crashes, as it well might, those who have over-borrowed and lose income or jobs are potentially in serious trouble."

But Nationwide economist Alex Bannister said the housing market continued to remain buoyant because of the strong economic conditions.

He said: "The housing market continues to hold up because of notably high em- ployment levels and low mortgage rates but its strong growth in recent months is being driven by high levels of confidence and the expectation that prices will rise strongly over the next few years."

July 8, 2002 09:30