Average house prices in the UK increased by 0.1% month on month in October with the market continuing to see strong growth seen since the end of 2013, the latest official figures show.
The data from the Office of National Statistics (ONS) also show that prices are up 6.9% year on year, taking the average price of a house to £217,000, some £14,000 higher than October 2015.
The main contribution to the increase in UK house prices came from England where house prices increased by 7.4% over the year to October 2016, with the average price in England now £233,000.
Wales saw house prices increase by 4.4% over the last 12 months to stand at £147,000. In Scotland, the average price increased by 4.0% over the year to stand at £143,000 while the average price in Northern Ireland currently stands at £124,000.
On a regional basis, London continues to be the region with the highest average house price at £474,000, followed by the South East and the East of England, which stand at £313,000 and £279,000 respectively. The lowest average price continues to be in the North East at £125,000.
The East of England is the region which showed the highest annual growth, with prices increasing by 12.3% in the year to October 2016. Growth in the South East was second highest at 9.1%, followed by London at 7.7%. The lowest annual growth was in the North East, where prices increased by 2.7% over the year.
The data also show that sales have slowed considerably, down 20.3% year on year in England in August 2016, the most up to date figures available. Sales fell by 11.6% in Wales, by 10.7% in Northern Ireland and by 2.8% in Scotland over the same period.
Richard Snook, senior economist at PwC, believes that price growth is set to fall in the New Year. ‘Whilst the annual inflation rate remains high, prices have barely moved over the last three months. If this trend continues into 2017, we will see a pronounced drop in growth rates in the New Year. We project that UK house price growth for 2017 could range between 2% and 5%,’ he said.
The figures back up the resilience of the housing market in the face of Brexit, according to Rob Weaver, director of Investments at property crowdfunding platform Property Partner.
‘The predicted property armageddon has simply not happened but Article 50 continues to cast a long shadow. We’ve seen a significant drop in sales post April when the stamp duty hike on second homes and buy to lets kicked in. With phased cuts in mortgage interest tax relief also starting next April, these lower transaction volumes could foreseeably continue in the mid to longer term,’ he pointed out.
According to Alex Gosling, chief executive officer of online estate agents HouseSimple, slowing price growth is not bad for the market as unsustainable double digit growth would do more harm. He pointed out that whereas in the aftermath of the 2008 financial crash, it was London’s attractiveness to foreign investors that stopped house prices from collapsing, there is no longer such a reliance on the capital.
‘The UK market isn’t just about London anymore, and we are seeing some impressive growth in the regions, particularly in the East and South East of England. Also, considering the seismic political events we have experienced over the past six months, the housing market has proved extremely resilient in the face of some pretty strong economic headwinds,’ he explained.
‘The exodus of buyers after the European Union vote never materialised, and although buyers are understandably being more cautious, crucially they haven’t deserted the market,’ he added.
