The year house prices rose [pounds sterling]1,400 a month.

Byline: BECKY BARROW;SAM FLEMING

THE price of the average home in Britain rose nearly [pounds sterling]1,400 every month this year, research shows.

On January 1, it cost [pounds sterling]157,250.

Today it would cost [pounds sterling]173,750.

House prices have risen faster than inflation since 1996. A buyer on the average salary of [pounds sterling]23,000 would have to borrow more than seven times their wage to buy the average home, the Nationwide building society said yesterday.

It believes house prices, which went up 10. 5 per cent this year, will keep on rising. Group economist Fionnuala Earley expects prices to jump by up to eight per cent in 2007.

Today the average mortgage is [pounds sterling]130,000, compared to [pounds sterling]50,000 a decade ago, the Council of Mortgage Lenders said.

However, there are warnings that prices cannot continue to rise.

In the past two months, experts have voiced fears that the unprecedented housing boom could be about to turn to bust.

Former Government adviser David Miles, now at the American investment bank Morgan Stanley, said: 'A substantial fall in real house prices is likely at some point in the relatively near future, though it could yet be one to two years away.' Days earlier, the accountancy firm PricewaterhouseCoopers said there was a one in three chance that house prices will be lower in 2010 than they are today.

Howard Archer, chief UK economist at Global Insight, warned that affordability will put the brakes on future house price growth. He said: 'We suspect that growing affordability pressures resulting from higher interest rates, muted real earnings growth and elevated house prices will increasingly feed through over the coming months to squeeze buyers out of the market and curb houseprice rises.' If prices fall, the biggest concern is for those homeowners who have taken out loans worth more than 100 per cent of their home. They are gambling that prices will continue to rise.

If they do not, they will be plunged into negative equity - a situation in which their home is worth less than the amount owed on their home loan.

Experts have also warned that large mortgage payments will serve to worsen debt problems.

Accountancy firm KPMG expects a record 150,000 Britons to become insolvent in 2007.

In an insight into the nation's debt problems, it said more than 3,000 who took out a type of insolvency called an Individual Voluntary Arrangement this year had debts 'exceeding [pounds sterling]100,000'.

Steve Treharne, the firm's head of personal insolvency, said: 'Too many people have debts that they have no realistic hope of repaying.

'Any excessive spending over Christmas and at the New Year sales, especially where goods are paid for on credit, risks tipping even more consumers over the edge.' Britons' borrowing is the highest of the Group of Seven nations, according to the Organisation for Economic Co-operation and Development. It said household debt had risen to record levels in many countries but British families are particularly 'vulnerable'.