UK house prices rise 6.1pc as strong demand pushes up values

Prices in the capital continue to increase but the pace of growth is slowing, says the Office for National Statistics

http://www.telegraph.co.uk/finance/property/house-prices/12000155/UK-house-prices-rise-6.1pc-as-strong-demand-pushes-up-values.htmlHouse prices across the UK have risen 6.1pc over the past year, pushing the average cost of a home in London beyond the half-million mark to £531,000.

The 6.1pc increase recorded in the year to September compared with a 5.5pc rise in the year to August. However, the pace of growth was much slower than the 12pc rise registered a year ago, says the Office for National Statistics.

The average price for a house in the UK now stands at £286,000, up from £273,000 last year.

Regionally, however, there were huge variations in growth over the 12-month period. Property prices rose 6.4pc in England and 10.2pc in Northern Ireland, but just 1.1pc in Wales and 1.1pc in Scotland.

House prices by region:

The average house price in England is £299,000, followed by £199,000 in Scotland, £175,000 in Wales and £162,000 in Northern Ireland.
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And while the London property market remains hot, there are signs the market is slowing. Prices in the East of England grew of 8.4pc, followed by the South East at 7.4pc, while London house prices increased 7.2pc over the year.
The North East is the only English region where prices remain below their pre-downturn peak, with prices 2.4pc lower than in January 2008. Northern Ireland enjoyed the fastest rate of growth, with prices there soaring 10.2pc, albeit from a low base.

Annual house price growth by area:

  Photo: Source: ONS
The figures also suggest the market may be easing for first-time buyers. Property values purchased by first-time buyers increased 4.3pc to £216,000 in the year to September, compared with a 4.5pc rise in the year to August.
Mortgage broker SPF Private Clients said a £216,000 average price tag on a home means first-time buyers will need to save at least £11,000 for a deposit, plus moving costs, and have a salary of around £50,000.
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Separate data earlier this year suggested the average first-time buyer needed an annual income of at least £41,000 to afford a home, while in London that figure rises to £77,000.
And while consumers might be benefitting from falling prices in some areas of life, such as travel, energy and food, the ONS said house price growth continues to outpace real term wage growth, making homes even more unaffordable for first-time buyers.
The authors of the report added that a shortage of new housing would continue to push up prices.

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