England saw the steepest price rises with an annual increase of 10.8% in England, while in Wales it was 5.7% and Scotland and Northern Ireland both saw year on year gains of 4.9%.
But a closer look at the figures show that annual house price increases in England were driven by an annual increase in London of 17.2% and to a lesser extent increases in the South East of 11.9% and the East at 9.6%.
So, excluding London and the South East, UK house prices increased by 6.7% in the 12 months to October 2014. And on a seasonally adjusted basis, average house prices increased by 0.1% between September and October 2014.
The ONS data also shows that in October 2014 prices paid by first time buyers were 12% higher on average than in October 2013. For existing owners, prices increased by 9.7% for the same period.
David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that it is good news that annual house price growth across England and Wales has more than doubled over the last 12.
‘The considerable uplift in values over the year to November 2014 has pushed the average price of a home in England and Wales above £280,000 for the first time. These figures are spurred on by London and the South East, where the housing recovery has been fast tracked,’ he said.
‘When these regions are removed from the calculations, a calmer annual rise in house prices materialises. After a temporary hiatus at the highest tiers of the property market, growth has rallied again in the capital with values in prime spots such as Kensington and Chelsea, and Hammersmith and Fulham surging 5.3% over the course of the month, hitting new price records along the way,’ he explained.
‘Yet after a solid advance in activity throughout 2014 to date, completed house sales withdrew last month, from a particularly busy October. This doesn’t undermine the strength and stability of the growth in activity experienced over the year as a whole in some locations,’ he added.
He believes that the changes to the Stamp Duty system should also allow activity to build further at the bottom rungs of the ladder, facilitating hefty savings. ‘This should help erode the upfront barriers of purchasing a home for the significant majority of buyers and sellers may feel the benefit of weightier demand, as well as being able to price their homes more realistically, without having to tactically negotiate threshold barriers,’ said Newnes.
‘In the year to September 2014, 69% of completed house sales on properties worth £1,125,000 or more were in London, and a further 19% took place in the South East. These more expensive regions will bear the brunt of stronger Stamp Duty tax at the highest levels,’ he concluded.
Steve Bolton, chairman of Platinum Property Partners (PPP) pointed out that house price growth has slowed noticeably in recent months. He believes this is partly due to tighter lending regulation for residential mortgages helping to rein in property prices.
'However, this won’t come as much comfort to first time buyers, who are facing property prices that are on average 12% higher than a year ago. With existing owners experiencing an annual price increase of 10% for the same period, it is clear that less affluent buyers who don’t already have a foot on the property ladder are bearing the brunt of rising house prices,' he said.
'Many would be buyers are trapped in a vicious cycle of paying for high rents and being unable to save thanks to low wage growth. While our research shows that two in five landlords plan to expand their buy to let portfolio in 2015 creating greater choice for renters and helping to drive down rental costs, it is clear that more needs to be done to provide quality, affordable accommodation that allows tenants to continue to save for their long term goals,' he added.
Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that price growth is still growing with London leading pushing them upwards. 'Buyers here are benefiting from greater choice of property available for sale, favourable lending conditions, and more pragmatic asking prices, keeping activity levels pulsing. While the capital had a running start at the housing recovery, the Chancellor’s stamp duty revisions may extend a helping hand to aspiring home owners in other regions by lowering some of the up-front hurdles of buying a property,' he said.
'Increasingly animated demand at the bottom of the market will enable more sellers to make their next move up the property ladder, and this boosted confidence will grease the wheels of growth into 2015,' he added.
