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Midlands and London drive 3.8% house price rise

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A buoyant English market drove UK house prices up 3.8% in the twelve months to August 2013, according to the Office for National Statistics house price index.

House prices in London were 8.7% higher than in August 2012. After London, the East and West Midlands saw the biggest growth, with price rises of 3.8% and 3.5% respectively. England as a whole saw house prices jump by 4% year-on-year, with all regions experiencing growth.

Both Wales and Northern Ireland saw annual growth of roughly 1%. However, in Scotland, house prices fell 0.7% compared to August 2012.

LMS chief executive Andy Knee said the London market should not overshadow the fact all regions apart from Scotland had experienced house price growth: “These figures show that there is not a ‘bubble’, but rather that there is a national upward trend being experienced by almost everyone.

“There are several reasons why house prices are continuing to rise. Not only are mortgage rates currently at their lowest level but high rents and low returns on savings mean that an increasing number of people are turning to property as a means of investment.”

A shortage in housing stock meant prices should continue to rise, he added. House prices for first-time buyers experienced above-average growth, leaping 4.9% year-on-year. For owner-occupiers, house prices increased by 3.3%.

LSL Property Services commercial director David Brown said there was an air of bullish confidence surrounding the housing market: “Such fervent consumer demand must also be satisfied by an increase in the supply of affordable homes if we are to maintain accessibility and avoid prices rising beyond reach of aspirational homeowners.

“Despite the greater mortgage availability, some may hold off on entering the market for the time being, in a bid to see wages increase and accrue a little more savings.”

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