Data from the Office of National Statistics show house prices are rising fastest in the East and South-East of England rather than London.
The Office of National Statistics (ONS) has published data showing average house prices rising 2% in July from £177,000 to £282,000 and is now 16.7% higher than the peak reached in 2007 before the financial crisis.
Over the year UK house prices have increased 5.2% to the end of July. The highest rise is the East of England rising at 8.3% with the average property now worth £302,000.
For first time buyers the cost of a new home is higher by 5.5% over the year to July and means they must find a larger deposit and have higher earnings to purchase their first home, with the average cost now at £215,000.
Second is Northern Ireland with a price rise of 7.4% and average prices of £154,000 although since significant falls during the financial crisis, this remains 42% below the peak of August 2007.
Large north-south price divide
The house price difference between the north and south of England is increasing as the North East have experienced a fall of -0.7% with the average home now worth £156,000 as the following table from the ONS shows:
| Area | Change | Value |
|---|---|---|
| East | 8.3% | £302,000 |
| Northern Ireland | 7.4% | £154,000 |
| South East | 6.7% | £354,000 |
| England | 5.6% | £295,000 |
| London | 5.5% | £525,000 |
| UK | 5.2% | £525,000 |
| East Midlands | 5.0% | £197,000 |
| West Midlands | 4.9% | £208,000 |
| Yorks and Humber | 4.7% | £183,000 |
| South West | 4.2% | £354,000 |
| North West | 3.7% | £182,000 |
| Wales | 0.3% | £173,000 |
| North East | -0.7% | £156,000 |
| Scotland | -1.3% | £196,000 |
In Scotland house prices reduced by the largest amount of -1.3% with average price of a home is £196,000 and Wales up only slightly at 0.3% and average prices of £173,000.
Existing homeowners have see prices higher by 5.5% for the year to July with average property prices for owner-occupiers now at £329,000.
London prices remain significantly higher with an average price of £525,000 although annual growth is not the highest at 5.5% to July and analysts believe double-digit rises have ended for now.
Lack of supply pushing up prices
According to Campbell Robb Shelter’s chief executive, by not addressing the dramatic shortage of homes in the UK house prices are pushed higher and higher.
This puts home ownership further out of reach for millions of young people and families that remain trapped living with their parents or in private renting.
Older remortgage buyers may reduce the supply of family homes on the market and avoid downsizing with the equity release mortgage buyer to access money from their home for holidays, home improvements or gift to a family member.
Private renters are also affected by the rise in house prices as new buy-to-let landlords would be expected by lenders to have higher rental incomes to cover the higher interest payments.
For home movers there is a rising gap between their current home and their next home which means they need an ever larger mortgage to move.
These increases do create an opportunity for remortgage buyers as higher prices allow them to release capital which they can use to improve their home.
What are your next steps?
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