House prices rise by 7%
The average UK house rose in price by 7% in the year to October, taking the price of a home to £287,000.
The data, published by the Office for National Statistics (ONS), also indicates that prices rose by 0.8% in the month of September alone.
England saw a 7.4% annual increase, taking prices to an average £300,000, while in Northern Ireland prices rose by 10.3% to £158,000. Scotland and Wales saw much lower rises of 0.9% and 1% respectively, taking prices to £196,000 and £174,000.
The increase in the annual rate of price growth was partly driven by the East of England, where prices grew by 10.4%.
The ONS added that nationwide house price rises could be explained by a shortage of homes for sale, at a time when demand is rising – the latest data from the Royal Institution of Chartered Surveyors indicated that the supply of new sales instructions coming to the market decreased for the ninth month in succession. At the same time, the ONS said, fewer homes were built in the year to October than the year before.
There was bad news for prospective first-time buyers as the ONS added that prices paid by first-time buyers were 5.9% higher on average than in October 2014 – putting property further out of reach of those hoping to buy soon.
The Council of Mortgage Lenders has also reported mortgage advances for house purchases rising by 8.5% month-on-month and 3.3% year-on-year to 65,300 in October. There were similar increases for first time buyers and for home movers.
“The ONS and CML data reinforce our belief that house prices will see solid increases over the coming months amid firm buyer interest (supported by decent fundamentals) and a shortage of properties,” Said Howard Archer, chief economist at IHS Global Insight. “We expect house prices to rise by around 6-7% in 2016. The shortage of properties poses a significant upside risks to these forecasts.”
See our section on buying property for tips and hints on how to get on the ladder.