House prices have risen again but this time it appears they might have risen past a dangerous threshold.
According to the Nationwide, UK prices increased by one per cent in June, taking the annual rate of increase to 11.8 per cent. It means the average price in the UK is £188,903 and in London £400,000. But, more worryingly, it means house prices have risen above their peak in 2007, just before the housing bubble burst.
The question now is whether a bubble is forming again and whether enough is being done to control it; so far, the evidence is variable. In London, for example, prices do look like they are out of control, although some estate agents in the city say buyers are at last beginning to show more caution.
According to the Nationwide's figures, there also appear to have been big rises in some parts of Scotland, most recently South Ayrshire and the Borders, although, again, the picture varies. There are some parts of the UK where prices are continuing to fall.
But even when these local variations are taken into account, the weight of evidence is that UK house prices are once again too high and rising too fast. What's more, there is already concern that the action taken by the Bank of England might not be enough to ensure a manageable balance in the market.
Robert Gardner, Nationwide's chief economist, is one of those who has his doubts. The Bank of England's measures, he said, are unlikely to have a significant impact on housing transactions or price growth and it is easy to see his point on the Bank's ruling that loans of 4.5 times a borrower's income or higher should account for no more than 15 per cent of new mortgages.
The problem with this measure (welcome though it is) is that loans of that scale account for only 10 per cent of the market which still leaves room for a great deal of expansion. In the longer term, it may be that the Bank will have to go further and restrict the lending further to 3.5 times income, which has always been recognised as the sensible upper limit anyway.
The other measure the Bank has taken, the stress test that ensures borrowers can keep up their mortgage payments in the event of an interest rate of up to 3 per cent, has more promise. The fact that Mark Carney, the Bank's governor, has repeatedly hinted at an imminent rate rise may itself help to dampen the market.
As for the UK Government, it must do more, particularly to encourage the building of more houses. There have been some encouraging signs of late (many construction firms have been taking on more staff, for example) but, earlier this week, it was revealed that UK Government officials expect a decrease in new builds this year.
If the dreaded housing bubble is forming again, that kind of news on home building will not help. The housing sector is unquestionably an important part of the economy, but the danger of the kind of price rises we are starting to see in some parts of the UK is that prices will once again become detached from realistic, average incomes. And that, as we learned in 2008, is not only unsustainable. It also risks undermining the entire economy.