Data released by the ONS (Office for National Statistics), revealed valuable data on average house prices and growth rates for all regions of the UK. According to their findings, August saw average property values in the UK increase to a new record of high of £274,000, after increasing by an annual rate of 11.7 per cent. During the 12 month period, house prices in the capital soared to £514,000, an increase of 19.6 per cent, another all-time high.
For those who have secured their spot on the property ladder, increasing house prices comes as a blessing with some London properties earning more monthly, than their owners. Although a benefit for some, house prices have been taking their toll on those looking to make their first property purchase. Potential property buyers are becoming more restricted as house prices are forcing them to cough up near unobtainable deposits. Since this time last year, first time buyers face paying 12.9 per cent more, making the cost of your average starter home roughly £210,000. Not only are house prices putting more pressure on first time buyers, but as of April this year, tougher legislation rules were introduced forcing lenders to thoroughly investigate borrowers and their ability to make repayments.
As expected, London prices increased faster than the rest of the UK and as of last month, the South-East, the East, the East Midlands, the West Midlands and the South-West have risen above their pre-financial crisis peak. The north however, is seeing a contrasting picture being the only region which has seen average prices fall. Although those in the south may see this as bitter news, some feel reassured by the fact that compared to recent months, the rate of growth has decreased to less than 1 per cent. Howard Archer, economist at IHS Global Insight, said: ‘Despite the robust August ONS data, we maintain the view that – with housing market activity off its early-2014 highs – house prices are likely to rise at a more retrained restrained rate overall through the coming months’.
Although the statistics provided by the ONS lag one month behind most house price indices, they are regarded as the most reliable. Providing the forecast by the ONS proves correct, buyers will feel less uncertainty, restoring confidence in the market and in those looking to make their first property purchase.