HOUSE prices in Hampshire are going through the roof with the cost of buying a home reaching record levels.

Estate agents in Southampton are reporting average rises of 20 to 25 per cent over the last year.

But housing costs at the lower end of the market have soared by over a third in the same period.

One studio apartment in Highfield went from £26,000 to £35,500 - which is a 35 per cent in just six months.

Latest figures reveal the average price of a semi-detached house in Southampton is now £86,150 compared with a figure of £75,850 a year ago.

Nick Jordon, director of Bradford&Bingley Morris Dibben estate agents, said: "We have seen quite dramatic rises in house prices this year.

"Things are steadying at the moment, as is usual at this time of the year, but prices will probably rise in a month.

"Two things are attracting more people into the market. It is probably better to buy than rent at the moment and with relatively low interest rates the mortgage commitment people have to make is more affordable."

Figures from the Halifax reveal that the average homebuyer in the South East now spends just over 23 per cent of their gross annual income on mortgage payments compared with a peak of 42 per cent in 1990.

Demand for all types of property is now outstripping supply with developers enjoying an end of century boom.

For example, 18 houses in the £70,000 to £80,000 price bracket being built by Lovell Homes at Hamble were all reserved within a week of release.

Philip Adams, regional operations controller for Halifax, said: "The housing market here continues to be extremely strong across most fronts and prices have now reached their highest levels ever.

"A shortage of properties coming onto the market is sustaining the momentum which built up prior to the summer holiday period."

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