The ONS data shows the pace of house price growth remains strong with London higher by 9.8% ahead of the UK average.
House prices across the UK continue to rise and are higher by 7.7% over the year to November 2015, the fourth consecutive month of growth according to the Office of National Statistics (ONS).
In London house prices show continued strength up 9.8% with an average price of £537,000. The South east is on the same percentage rise and both behind the East higher by 10.2% over the year.
Average UK house prices are now at £288,000 and for first time buyers the rise in house prices would mean they would require a larger deposit or household earnings to afford a larger mortgage for their first home.
Prices moving faster in the South East
The ONS data shows house prices are moving faster in the East of England up 10.2% followed by London and the South East up 9.8%.
For remortgage buyers rising prices can be an opportunity if they want to make home improvements such as a new kitchen and bathroom or extension as they could release capital with a mortgage advance.
Continued upward pressure on house prices is the result of a shortage of supply and a strengthening demand says the ONS. This is supported by data from the Bank of England reporting a shortage of properties available increased competition.
Across the country the ONS figures showing house prices and annual changes for November 2015 are as follows:
| Area | Annual Changes | House Prices |
|---|---|---|
| London | 9.8% | £537,000 |
| South East | 9.8% | £365,000 |
| East | 10.2% | £314,000 |
| England | 8.3% | £302,000 |
| UK | 7.7% | £288,000 |
| South West | 6.5% | £266,000 |
| West Midlands | 6.8% | £211,000 |
| East Midlands | 6.2% | £199,000 |
| Scoltand | 0.4% | £195,000 |
| Yorks and the Humber | 3.3% | £184,000 |
| North West | 5.0% | £183,000 |
| Wales | 1.3% | £173,000 |
| Northern Ireland | 4.6% | £158,000 |
| North East | 0.4% | £157,000 |
London property remains the most expensive with an average price of £537,000 followed by the South East with £365,000.
Rising house prices allows the equity release mortgage buyer to access money using a lifetime mortgage and use this to consolidate debt, for home improvements or reduce inheritance tax owed by your beneficiaries.
For first time buyers the average price paid in the UK was £221,000 up 7.4% over the year to November which has improved from 5.9% of the previous month and the highest figure since the 7.8% recorded in March this year.
This compares to the price paid by a former owner-occupier of £335,000 up 7.8% for the year to November. For home movers the gap between their current home and the next is greater and they must find the difference with a larger mortgage or deposit.
House prices expected to increase further
Demand for house purchases remains strong according to the Bank of England’s November Inflation Report. This showed that mortgage approvals remain high and was 20.8% higher in the year to November 2015.
The Bank of England reported that weak supply of properties for sale could be due to home movers reluctance to place their property on the market without the availability of properties to purchase.
This was supported by the Royal Institution of Chartered Surveyors (Rics) report that sales instructions had decreased for the tenth month in a row.
Data from the ONS indicates that new-build homes reduced by 1.6% in the year to October although this was a smaller reduction than the three previous months.
Even with the pressure on house prices, some areas are struggling to increase and are well below the UK average including Scotland up only 0.4% in the year to November, the North East also up by 0.4% and Wales higher by 1.3%.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth for home or garden improvements and holidays.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, property value tracker chart and mortgage cost calculator.
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