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London house prices soar 9.7% – ONS

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UK house prices rose 3.3% in the year to July with first-time buyers and Londoners experiencing the biggest increase, according to the Office for National Statistics.

First-time buyers saw an above average jump in house prices – those who bought houses in July 2013 paid 4% more than in July 2012.

Londoners saw house prices jump 9.7% year-on-year, and the South East, the East Midlands and Northern Ireland also saw significant rises.

The Finance Planning Group chief executive Terry McCutcheon said house prices were repeating previous trends: “When house prices start to go up in value it starts in central London and ripples out.

Brokers should be aware of markets outside the capital, he added: “In the first-time buyer market properties are more affordable outside of London and the South East. People who work in London do often commute from quite far out.”

House prices rose the fastest year-on-year since December 2012, according to ONS records. The index provides a more conservative picture than the Halifax house price index, which earlier this month suggested house prices were increasing at their fastest levels for three years. 

House prices rose by 0.3% between June and July 2013, the index said. The average UK house price in July was £245,000.

Excluding London, UK house prices increased by only 0.8% in the year to July. Prices fell by 2% in Scotland and by 0.7% in Wales.

Urban Sales and Lettings director Oliver Atkinson said ‘explosive’ growth in London more than made up for the more subdued picture elsewhere: “Buyer sentiment is improving steadily, and there is a growing sense that – despite the Bank of England’s forward guidance – the current cheap mortgages won’t be around forever.

“The result is the release of a lot of pent-up demand from first-time buyers, as those who have saved hard for a deposit decide that now is the time to take the plunge.”

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