NATIONAL NEWS: UK house prices surge to record peak in August
House prices surged to a record peak of £284,000 on average across the UK in August after climbing by £2,000 month-on-month, official figures show.
Property values in parts of northern England are now rising at a faster annual pace than those in London, according to the Office for National Statistics (ONS) figures.
Across the UK, house prices are 5.2 per cent higher than they were a year ago. A typical first-time buyer faces paying 3.8 per cent more than they would have done a year earlier, with the average price paid for a starter home now at £215,000.
At £298,000 on average, house prices across England are at an all-time high, the ONS said, after increasing by 5.6 per cent over the last year.
But house prices in Scotland are still below the record levels seen there in March, standing at £198,000 typically after dipping by 0.9 per cent year-on-year.
In Wales, property values are also below their record level seen in January, standing at £174,000 on average in August after edging up by 0.8 per cent annually.
House prices in Northern Ireland are still 43 per cent below their 2007 peak, reaching £151,000 in August after increasing by 2.9 per cent over the last year.
In London, prices increased by 4.2 per cent in the 12 months to August - while in the North West and Yorkshire and the Humber they increased at faster rates of 4.7 per cent and 4.8 per cent respectively.
At £186,000 on average, house prices in Yorkshire and the Humber surpassed their pre-economic downturn peak reached in 2008 for the first time in August.
As well as Yorkshire and the Humber, house prices also hit new records in the North West, the East of England, the South East of England and the South West of England in August.
House prices in the East of England have increased more than twice as fast as those in London over the last year, with a 8.8 per cent annual increase taking average property values there to £306,000.
While London still has the most expensive property prices, at £522,000 on average, they are slightly down compared with July, the ONS said.
The North East of England is the only English region where house prices have yet to surpass their 2008 peak, with average values there standing at £160,000.
Adrian Gill, director of Reeds Rains and Your Move estate agents, said: “The cheaper northern regions are experiencing the fastest growth in property sales, while a shortage of property stock on the market in the south is slowing activity.”
He said that in London, the more affordable boroughs are driving the market rather than the most expensive areas.
Howard Archer, chief UK and European economist for IHS Global Insight, said that a limited choice of properties for sale for buyers to choose from is “clearly exerting upward pressure on house prices”.
He added: “We expect house prices to see solid increases over the coming months amid firm activity. We expect house prices to rise 7 per cent in 2015 and then by 6 per cent in 2016.”
He said the market is likely to continue to be supported by stronger earnings growth and growing consumer confidence as the economy recovers, as well as continued low mortgage rates.
Campbell Robb, chief executive of Shelter, described the figures as “yet more evidence of how completely out of reach home ownership is becoming for typical families”.
He said: “The only way to provide a stable future for the millions of people on typical incomes bearing the brunt of the housing crisis, is for George Osborne to start listening to ordinary people and invest in homes that they can actually afford.”