Year-on-year house prices in England and Wales have grown by 7%. The increase is being driven primarily by strong rise in prices in London and the South East, which increased at an annual rate of 9.5% and 8.1% over the previous year.

Sources at the Bank of England attribute the price growth entirely to the growing need for new homes. This is a result of the government's open immigration policy and subsequent population increase, a dramatic rise in single-person households, along with severe planning restrictions which prevent house builders from responding to demand.

According to the UK's National House-Building Council (NHBC), which covers over 80% of new homes in the UK, the first eight months of 2006 showed 47% of new homes started in the UK were flats and maisonettes. In contrast, 20% of new homes started during the first eight months of the year were detached properties.

Imtiaz Farookhi, NHBC's Chief Executive, said: "In 2000, high rise building made up less than a quarter (22%) of new housing stock in the UK, however in 2005, this number almost doubled to 44%. With the demand for multi-storey building dwellings set to continue, especially as house builders endeavour to meet the demand for new homes, the industry must be cautious not to swamp the market with one type of home that might not fit with the aspirations of future homebuyers."

Additional statistics by NHBC for August 2006 show that the number of UK applications to build new homes increased substantially when compared with figures for August 2005. A total 17,536 applications were made to build new homes in the UK in the combined public and private sectors, showing a 29% increase on the same month in 2005 (13,639).