“ECONOMIC chaos” could be on the way as house prices hit new heights amid slumping wages, TUC leader Frances O’Grady warned yesterday.

The Office for National Statistics announced a record house and property surge of 9.6 per cent — putting the average British home at nearly £273,000 — compared to just 2.2 per cent for wages in the last year.

“House prices are going up four times faster than people’s wages,” said Ms O’Grady.

“No wonder mortgage approvals are falling and first-time buyers are struggling to save a large enough deposit.

“We all know that housing bubbles burst and cause economic chaos.”

Turning to the Tories’ “incredibly unpopular” flagship right-to-buy policy, she added: “There is no sign the government yet understands the challenge of ending the housing crisis.”