Data from the Office of National Statistics (ONS) shows house prices outstripping inflation even though the market is off the recent peak.
UK house price increased by 10.4% for the year to in October which was lower than the seven year peak of 12.1% reached in September. It remains ahead of of Consumer Prices Index (CPI) for cost of living that increased by 1.3% for the year to October.
According to the ONS house prices increased by 0.1% for the month between September and October with average house prices at £271,000.
Excluding London and the South East of England, the rest of the country experienced 6.7% in house price inflation for the year to October.
London and South East leading prices
The leading areas remain London with 17.2% rise in house prices of the year to October followed by the South East of England up 11.9% and the East of England up by 9.6%.
Average prices of London properties in October is £504,000 and this has reduced by £10,000 since July 2014 when the price was £214,000.
Older homeowners with considerable value in their property offers the equity release mortgage buyer access to cash for home and garden improvements, holidays or gift to a family member or friend.
For properties bought by first time buyers average prices have increased by 12.0% over the year which is lower than for September 2014 at 13.3%. The average price paid by a first time buyer is now £208,000.
Prices for first time buyers are still increasing faster than for owner occupiers, including remortgage buyers and home movers, where the average is 9.7% over the year to October 2014. This is down from the level the previous month of 11.5% and the average price paid for a home is £312,000.
Property prices slowing
According to the ONS the majority of areas have seen a slowing in house price inflation across the country to October 2014 are as follows:
| Area | Change | Value |
|---|---|---|
| London | 17.2% | £504,000 |
| South East | 11.9% | £337,000 |
| East | 9.6% | £284,000 |
| England | 10.8% | £283,000 |
| UK | 10.4% | £271,000 |
| South West | 7.2% | £249,000 |
| West Midlands | 4.7% | £197,000 |
| Scotland | 4.9% | £194,000 |
| East Midlands | 6.5% | £186,000 |
| Yorks and the Humber | 6.1% | £177,000 |
| North West | 6.0% | £175,000 |
| Wales | 5.7% | £172,000 |
| North East | 3.9% | £152,000 |
| Northern Ireland | 4.9% | £137,000 |
The rise of house prices now means owning your own home is out of reach to millions of young people and families according to Campbell Robb, chief executive of Shelter.
With the average house in England costing ten times the average income, large deposit requirements and tougher rules for mortgages with lenders basing loans on affordability, many people will be forced to rent.
The lack of suitable properties on the market at an affordable price for home movers means they will remain in their current home and saving for a bigger deposit.
The government has launched a new Starter Home initiative to offer a 20% discount on 100,000 new build homes and the initiative is to begin an eight-week consultation process.
These homes will be built on brownfield land and developers are going to be released from the usual development restrictions to boost availability to first time buyers under age 40.
The Starter Home initiative is not available for buy-to-let investors, home movers or remortgage buyers.
What are your next steps?
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