ONS: UK house prices hit record high

UK house prices increased by 10.2% in the year to June 2014, down from 10.4% in the year to May 2014 according to the latest ONS data.

House price annual inflation was 10.7% in England, 3.5% in Wales, 6.0% in Scotland and 4.9% in Northern Ireland.

House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth.

Annual house price increases in England were driven by an annual increase in London of 19.3% and to a lesser extent increases in the South East (9.7%) and the East (7.9%).

Excluding London and the South East, UK house prices increased by 6.3% in the 12 months to June 2014.

On a seasonally adjusted basis, average house prices increased by 0.5% between May and June 2014.

In June 2014, prices paid by first-time buyers were 12.0% higher on average than in June 2013. For owner-occupiers (existing owners), prices increased by 9.5% for the same period.

David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL Property Services plc, comments:  “The headline growth figure may look sizeable, but behind the scenes house price growth is more moderate and sustainable beyond London and the South East. These two weighty regions distort the story and are not representative of the wider UK housing market – and therefore should not disorient overarching government policy.

“Prices actually dropped in seven regions across England and Wales in June, as the waters calm. This return to a more natural state of affairs indicates a stable market.  Lending has largely adapted to the wave of regulatory changes in the spring, and sales are getting back on course as demand for homes increases – with completions rising to the highest level in seven years in July.

“New buyer demand is a vital bedrock for the recovery to continue building on, and further interventions or borrowing caps could pull the rug out from under the market.  Outside of the capital, Help to Buy is giving many households a much-needed leg up onto the ladder; helping activity levels and ensuring growth makes further headway to reach areas of the country that are still only just getting back on their feet.”

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