The UK house price index level (184.9) has dropped back slightly from the peak last month (186.0) according to latest data from the Office for National Statistics.
However, annual UK price growth has continued to increase due to larger falls in property prices in September 2012.
In the 12 months to September 2013 UK house prices increased by 3.8%, up from a 3.7% increase in the 12 months to August 2013.
House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average.
The year-on-year increase reflected growth of 4.2% in England and 1.4% in Wales, offset by falls of 1.1% in Scotland and 1.5% in Northern Ireland.
Annual house price increases in England were driven by rises in London (9.4%), the South East (4.0%) and Yorkshire and The Humber (3.0%).
Excluding London and the South East, UK house prices increased by 1.4% in the 12 months to September 2013.
On a seasonally adjusted basis, UK house prices were unchanged between August and September 2013.
In September 2013, prices paid by first-time buyers were 5.3% higher on average than in September 2012. For owner-occupiers (existing owners), prices increased by 3.2% for the same period.
Paul Smith, CEO of haart, said: “Average property prices are up again, a consequence of the continued discrepancy between housing supply and freshly stimulated buyer demand. Our latest housing market monitor shows that new buyer registrations are growing at approximately nine times the rate of supply on an annual basis.
“A survey by RICS today indicates that housebuilding starts are on the up, but we need far more existing homes to come to market which will keep a lid on property price growth. However, many prospective sellers are deterred by the prohibitive cost of moving. The government must now consider a stamp duty holiday for properties under £600,000 – a significant cut-off point as this is the upper price limit for Help to Buy.”
Stuart Law, CEO of Assetz, commented:
“Property prices have been sky-rocketing in London for many months, but we are now seeing price growth ripple out from London and the South East to the majority of regions.
“However, we have not yet reached ‘bubble’ prices. Part of the evidence for this is that buy-to-let investors are still able to achieve very good gross yields on their investments of around 7-8%. Just before the 2007 market peak, average yields were around 5% as property price growth was far greater than rises in rents. Investors at that point were speculating solely on continuing price growth and happy to accept cash losses on rental income after running costs.
“The example given by Shelter today, that every home in England would fit on the same amount of land we devote to golf courses, just shows how ridiculous the disgruntled NIMBY cries are given the massive population growth in the UK. The only real way to address the housing shortage is to build considerably more homes, and as a consequence, slow down house price growth.”
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