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UK house prices rise by 6.1% – ONS

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
17/11/2015

UK house prices increased by 6.1% in the year to September taking the average UK house price to £286,000, government statistics show.

This compares to a 5.5% rise in the year to August. On a seasonally adjusted basis, average house prices increased 0.8% between August and September. Annual house price inflation reached 6% in England, 1.1% in Wales and Scotland and 10.2% in Northern Ireland.

Excluding London and the South East, UK house prices rose by 5% over the year to September, up from 4.8% in August. The South East and the East of England, the areas with the largest yearly increases, saw rises of 7.4% and 8.4% respectively.

Richard Sexton, director of e.surv chartered surveyors, said: “The East of the country, boosted by its location as a commuter haven, is now challenging even the capital’s house price growth. As the prices of London persist, buyers are forced to look elsewhere.”

‘Strong employment hubs’ such as Cambridge are making the East an attractive alternative to Greater London and injecting new energy into the area’s housing market, he added.

The average London home now costs £531,000, an increase of 7.2% over the year to September, up from 5.4% in August.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said this price highlights why it is difficult for someone on an ‘average’ income to get on the housing ladder in the capital.

“Even if buyers can save up the deposit required, their income may simply not support such a large mortgage, making it very difficult to buy on your own,” he said.

First-time buyers paid on average 4.3% more for their starter homes in September than they did in the same month last year.

Harris said: “There are an increasing number of options for first-time buyers with many lenders offering high loan-to-value deals. However, with the average price paid by a first-time buyer now £216,000, that still means saving at least £11,000 for a deposit, plus moving costs, and a salary of around £50,000.”

Jeremy Leaf, former RICS chairman and north London estate agent, said that ‘demand for home ownership is high but affordability is a problem.’

“Unless you earn way above the national average salary, you have precious little hope of being in a position to buy. Generation Rent is being left out in the cold: they have aspirations to buy but are being pushed further away from their goal,” he said.

Haart Estate Agents attributed an ‘increasing divergence’ between demand and supply as the primary driver for the house price growth trend.

Its own data estimated new buyers figures had surged 8.4% in the last year, with a fall in supply of 14.3% over the same time period, estimating an average of 13 potential buyers for every property on the market.

“We predict that next year will see no real improvement in levels of property stock unless the government takes drastic action. Without a radical move, the core of the UK property market will continue to see house price increases of up to 10%,” Haart CEO Paul Smith said.


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