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15/10/2013 06:15 BST | Updated 15/10/2013 06:19 BST

UK Housing Market 'Looks Somewhat Like A Bubble', Warns Robert Shiller

Rober Shiller, a professor of economics at Yale, participates in a panel discussion at Time Warner's headquarters Monday, June 15, 2009 in New York. (AP Photo/Mark Lennihan)
AP
Rober Shiller, a professor of economics at Yale, participates in a panel discussion at Time Warner's headquarters Monday, June 15, 2009 in New York. (AP Photo/Mark Lennihan)

The UK is going through a housing bubble, according to Robert Shiller, who recently won a Nobel Prize for Economics for his work including the successful prediction of the 2007 house price crash.

Shiller blamed the new housing bubble on the availability of easy credit, telling BBC's Newsnight: “It looks somewhat like a bubble, prices are going up pretty fast. Whenever you have easy credit, that helps promote a bubble.”

The Nobel Laureate's warning comes as official figures released today found that the average house prices in the UK were now above their 2008 pre-recession peak after growing 3.8% over the last year.

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According to the Office for National Statistics, London house prices shot up by 8.7% in the last year, with the East Midlands seeing prices rise 3.8%.

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Shiller, a Yale University professor, won the Nobel Prize on Monday for his research into asset prices. He is celebrated for predicting the dot-com crash of the early 2000s and the house price implosion in 2007.

The latest house bubble warnings come amid mounting concern that George Osborne's'Help to Buy' mortgage guarantee scheme risks pushing up house prices by boosting demand while house building projects remain sluggish.