By . Matt Chorley, Mailonline Political Editor . Middle class families are being prices out of buying their own home, Vince Cable has warned. The Business Secretary sounded the alarm on the housing bubble, warning homes were now ‘unaffordable’ for many. Mr Cable insisted the only way to solve the problem was to ‘build many more houses’. Business Secretary Vince Cable warned buying a home was now unaffordable for people on middle incomes . House prices are soaring by up to 18 per cent across the country, according to Nationwide. Britain’s biggest building society said property values have now been rising for 15 straight months, the longest run since the credit crunch began in 2007. Manchester was the fastest riser last year - up 18 per cent, compared with 17 per cent for London. Parts of the capital, such as Lambeth and Brent, saw extraordinary growth of 30 per cent. Prices went up 14 per cent last year in Brighton and Cambridge and 13 per cent in Oxford and Carlisle. Mr Cable told The Independent: ‘The fundamental problem is a chronic imbalance between supply and demand. A recovering mortgage market is just fuelling demand again. ‘A family on average income is nowhere near able to afford a house at the average price. Property has become much more unaffordable for people on middle incomes.' In the mid-1990s the average home cost around three times average earnings. The figure peaked at more than six times before the 2007 crash, before slumping. But it has now crept back up to 5.5 times average incomes, Mr Cable warned. Earlier this week Tory housing minister Kris Hopkins said it is a ‘good thing’ that property prices are rising. ‘I bought a house and I expect the value to rise, and I'm sure you did as well,’ he told Jeremy Paxman on BBC2’s Newsnight. Chancellor George Osborne insisted he was being 'vigilant' of the problems in the housing market . But Mr Cable insisted: ‘I do not agree with Kris Hopkins that rising house prices are a good thing. If you are an owner-occupier who has paid off your mortgage, it is an increase in your paper or real wealth. ‘But if you are a young family trying to get into the housing market and it is unaffordable, it is an extremely bad thing. ‘The number of council houses actually fell under Labour. But more needs to be done. We must build many more houses - that and only that is the solution to our housing problem.’ Chancellor George Osborne yesterday spoke of the need to be ‘vigilant’ about increases in housing prices. But he insisted that fears of a bubble should not get in the way of giving older people more flexibility on how they deal with their pensions. Challenged over warnings of a house price bubble, Mr Osborne told the Treasury select committee: ‘I say we have to be vigilant. I think we have to keep a close eye. ‘There is of course a regional variation in this. I think you should at least draw a distinction between some of the phenomena in central London, which is caused by international money and the like coming into central London as a form of investment, and what you see in most of the places represented by members of this committee. That's just a feature of our housing market. ‘Ultimately, I want to live in a country where people who have the aspiration and who can afford to buy their own home are able to do so, and that means that we need to build homes for them.’
Business Secretary warns of 'imbalance between supply and demand'
Property values have risen for 15 straight months, longest run since 2007 .
Manchester prices rose 18%, above London at 17%, says Nationwide .
By . Matt Chorley, Mailonline Political Editor . Middle class families are being prices out of buying their own home, Vince Cable has warned. The Business Secretary sounded the alarm on the housing bubble, warning homes were now ‘unaffordable’ for many. Mr Cable insisted the only way to solve the problem was to ‘build many more houses’. Business Secretary Vince Cable warned buying a home was now unaffordable for people on middle incomes . House prices are soaring by up to 18 per cent across the country, according to Nationwide. Britain’s biggest building society said property values have now been rising for 15 straight months, the longest run since the credit crunch began in 2007. Manchester was the fastest riser last year - up 18 per cent, compared with 17 per cent for London. Parts of the capital, such as Lambeth and Brent, saw extraordinary growth of 30 per cent. Prices went up 14 per cent last year in Brighton and Cambridge and 13 per cent in Oxford and Carlisle. Mr Cable told The Independent: ‘The fundamental problem is a chronic imbalance between supply and demand. A recovering mortgage market is just fuelling demand again. ‘A family on average income is nowhere near able to afford a house at the average price. Property has become much more unaffordable for people on middle incomes.' In the mid-1990s the average home cost around three times average earnings. The figure peaked at more than six times before the 2007 crash, before slumping. But it has now crept back up to 5.5 times average incomes, Mr Cable warned. Earlier this week Tory housing minister Kris Hopkins said it is a ‘good thing’ that property prices are rising. ‘I bought a house and I expect the value to rise, and I'm sure you did as well,’ he told Jeremy Paxman on BBC2’s Newsnight. Chancellor George Osborne insisted he was being 'vigilant' of the problems in the housing market . But Mr Cable insisted: ‘I do not agree with Kris Hopkins that rising house prices are a good thing. If you are an owner-occupier who has paid off your mortgage, it is an increase in your paper or real wealth. ‘But if you are a young family trying to get into the housing market and it is unaffordable, it is an extremely bad thing. ‘The number of council houses actually fell under Labour. But more needs to be done. We must build many more houses - that and only that is the solution to our housing problem.’ Chancellor George Osborne yesterday spoke of the need to be ‘vigilant’ about increases in housing prices. But he insisted that fears of a bubble should not get in the way of giving older people more flexibility on how they deal with their pensions. Challenged over warnings of a house price bubble, Mr Osborne told the Treasury select committee: ‘I say we have to be vigilant. I think we have to keep a close eye. ‘There is of course a regional variation in this. I think you should at least draw a distinction between some of the phenomena in central London, which is caused by international money and the like coming into central London as a form of investment, and what you see in most of the places represented by members of this committee. That's just a feature of our housing market. ‘Ultimately, I want to live in a country where people who have the aspiration and who can afford to buy their own home are able to do so, and that means that we need to build homes for them.’
more houses’. Business Secretary Vince Cable building society said property values have now been rising for 15 straight months, the longest run since the credit crunch began in 2007. between supply and demand. A recovering mortgage