Average house prices in the UK increased by 5.8% in the year to February 2017, taking the average value of a home to £217,502, the latest official figures show.
This was up from 5.3% in the year to January 2017 but still remains below the average annual house price growth seen in 2016 of 7.3%, according to the data published by the Office of National Statistics.
A breakdown of the figures show that prices in England increased by 5.8%, in Wales by 1.8%, in Scotland by 3.1% and in Northern Ireland by 5.7%.
This takes the average value in England to £234,466, in Wales to £145,293, In Scotland to £139,000 and in Northern Ireland to £125,000.
On a regional basis, London continues see the highest average house price at £475,000, followed by the South East and the East of England at £312,000 and £282,000 respectively. The lowest average price continues to be in the North East at £124,000.
The East of England is the region which showed the highest annual growth, with prices increasing by 10.3% in the year to February 2017, followed by the East Midlands at 7.5%, and the West Midlands at 7%. The lowest annual growth was in the North East, where prices increased by 2.2% over the year.
The UK Property Transaction statistics show that in February 2017 the total number of seasonally adjusted property transactions completed in the UK with value of £40,000 or above decreased by 1.9% compared with February 2016.
Nicholas Finn, executive director of Garrington Property Finders, believes that the gently increasing rate of price growth is welcome but it should not be confused with robust health in the property market.
‘Rather it’s a symptom of the chronic lack of supply. The number of homes for sale is still very limited in many areas. Ordinarily such constrained supply, plus the continued availability of incredibly cheap mortgages, would drive prices up much faster than they are.
So it’s a measure of how much power buyers have that prices are still rising at such modest levels,’ he said.
‘Although there are increasing numbers of committed and motivated buyers coming to market, they remain deeply price sensitive and will happily walk away from properties they feel are overpriced,’ he explained.
He also pointed out that while there is a lot of competition for mid-priced properties where there’s simply not enough stock to go around, at the top end of the market, buyers are increasingly able to push for and get big discounts.
‘With consumer price inflation holding steady in March, the Bank of England will continue to delay any interest rate rise for as long as possible, leaving the way clear for the property market to continue its slow upward progress,’ he added.
According to Doug Crawford, chief executive officer of My Home Move, while the property market is not racing ahead at the same speed as this time last year, when investors were very active ahead of stamp duty change, buyers and sellers should be reassured by the current market.
‘There is a bit of regional variation at play, with the areas that have seen substantial house price growth in recent years cooling off, notably London and the South East. Arguably this is needed to counteract some of the rapid growth over recent years,’ he said.
‘The fact is that the fundamentals are in place for a solid year for the housing market, with robust levels of demand significantly outstripping supply. The biggest obstacle for a happy housing market remains the access to the first step of the housing ladder for first time buyers, even in areas where the market is cooler,’ he added.