Property prices in the UK have increased 7.0% over the year to October with an average price of £287,000 according to the ONS.
Latest figures from the Office of National Statistics (ONS) show annualised UK house prices are up 7.0% to October 2015 compared to 6.1% to September.
The highest rise is for East of England with 10.4% followed by Northern Ireland with 10.3% and the South East on 9.5%.
This means average house prices for the UK are at £287,000 whereas England is £300,000 considerably higher than Wales at £174,000 and £158,000 in Northern Ireland.
Fastest rise in East England
Figures show property prices are rising at the fastest rate in East England up 10.4% with average house prices at £310,000 followed by Northern Ireland with a 10.3% rise and £158,000 price for an average property.
The rapid rise in property prices makes it difficult for first time buyers as they now need a higher earnings or a larger deposit to buy their first home.
It also means home movers will find the price gap for their current home and the next is greater requiring a larger mortgage.
Across the country the ONS figures are as follows:
| Area | Change | Value |
|---|---|---|
| London | 7.7% | £531,000 |
| South East | 9.5% | £364,000 |
| East | 10.4% | £310,000 |
| England | 7.4% | £300,000 |
| UK | 7.0% | £287,000 |
| South West | 6.4% | £262,000 |
| West Midlands | 4.6% | £206,000 |
| East Midlands | 6.3% | £198,000 |
| Scotland | 0.9% | £196,000 |
| Yorks and the Humber | 3.5% | £183,000 |
| North West | 4.4% | £183,000 |
| Wales | 1.0% | £174,000 |
| North East | 2.9% | £158,000 |
| Northern Ireland | 10.3% | £158,000 |
Price rise in London was 7.7% over the year to October which was an increase on the previous month of 7.2% for the year.
Higher property values for older homeowners allows the equity release mortgage buyer to access wealth to consolidate debt, gift to a family member or pay for care at home.
The ONS has said the upwards pressure on house prices may be a result of a shortage of supply and a strengthening of demand in the housing market.
One advantage of rising house prices for homeowners are remortgage buyers can now release capital for home improvements.
Property demand to continue
Demand for property is likely to continue from buy-to-let landlords since chancellor George Osborne will bring in a new Stamp Duty tax of 3% from April 2016, in addition to the tax paid for residential homes.
For a £200,000 residential property a homeowner would only pay 2% or £1,500 but the new tax for buy-to-let landlord pays increases the cost to £7,500.
This means landlords are likely to act now to beat the deadline increasing demand at a time when there is a shortage to the supply of properties.
In addition mortgage lending has continued to grow strongly up 9% to 65,300 in October according to the Council of Mortgage Lenders (CML). The number of first time buyer mortgage loans advanced was also at a 29,900 high for the month.
Paul Smee, director general of the CML has said homeowner and buy-to-let purchases have continued upwards during the month and the market looks set to finish the year strongly.
With improving employment and low UK inflation the conditions for more demand in the housing market are likely for 2016.
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.
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 monthly cost calculator.
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.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
