Mark Carney
Governor of the Bank of England Mark Carney has expressed concerns about the UK developing a housing bubbleReuters

Property prices in England and Wales have increased by 3.2% year on year, fuelling fears that the UK could be heading for a housing bubble.

London saw the greatest increase in prices, up 10.6% since December 2012 and up 1.6% from October to November 2013, according to monthly figures published by the Land Registry.

The monthly House Price Index found the average home had increased by 0.1% between October and November, bringing its value to £165,411.

The east saw the most significant monthly price fall with a 0.7% decrease in house prices.

The north east was only the region which saw its prices fall compared to a year ago - a decrease of 1.6%.

Repossessions v Sales

Figures showed that repossessions were down significantly compared to a year ago.

In September 2013, there were 1,036 compared to 1,337 a year ago, representing a decline of 23%.

Repossessions declined the most in the south-east where they dropped by 39%. There were 185 repossessions in September 2012, compared with 112 a year later.

House sales were up considerably on the year as data revealed that the number of house sold in September 2013 was 65,378, which was higher than the 52,870 sold in September 2012.

Fears of a housing bubble could also be stoked by the increase in properties being sold for over £1m ($1.6m, €1.1m), which increased by 60% throughout England and Wales.

These premium sales jumped from 639 in September 2012 to 1,020 a year later.

The average price of a detached house was £260,460 in November 2013 while it was £252,900 compared to the previous year - a difference of 3%.

Terraced houses saw the greatest increase: an average price rise of 3.9% year on year, from £121,047 to £125,729.

Semi-detached houses saw the lowest increase of average price at 2.5% compared to the previous year, or £152,505 rising to £156,335.