House price growth rebounds to 5.4%: ONS

Paola Ditto
Novembre 14, 2017

Data released by the Office for National Statistics today showed the average United Kingdom house price rose to £226,000 in September, up £11,000 on a year earlier.

The North West showed the highest annual growth, with prices increasing by 7.3% in the year to September. "Without a radical house building plan for both first-time buyer homes and purpose-built rental properties, prices will continue to rise over the coming decades".

The continued shortage of homes on the market remains one of the key drivers of house price growth, rather than a particularly resilient market.

The main contribution to the increase in United Kingdom house prices came from England, where house prices increased by 5.7% over the year to September, with the average price now at £244,000. In Scotland, the average price increased by 3.1 per cent over the year, reaching £145,000.

Trussle chief executive Ishaan Malhi says: "Many people expressed concern for the housing market after Brexit, but prices are 5.4 per cent higher than they were this time a year ago".

This was followed by the South West at 6.6% and the East Midlands at 6.4%.

Wales saw house prices increase by 5.3% over the last 12 months to stand at £153,000.

Despite fears of a downward spiral in property prices, most experts believe the chronic under-supply of housing combined with low interest rates means a major downturn or collapse in the market is unlikely. With wages growing just 2.2% in the last 12 months, the growing challenge facing first time buyers is plain to see.

"The Budget is now a little over a week away, and rumours are already swirling about some Government support for first time buyers".

Richard Snook, a senior economist, PwC, said: "The trend that has been emerging over the summer and autumn is the rest of the United Kingdom outperforming London".

The lowest annual growth was in London, where prices increased by 2.5% over the year, followed by the North East at 4.4%.

"Our latest market projection, published in July, was for growth of between 3% and 5% in 2017, with 4% as the central scenario".

This is the 10th consecutive month where the growth in London house prices has remained below the United Kingdom average. "Going forward, raised borrowing costs with the Bank's rate hike are likely to encourage discounting to some extent, but - aside from squeezed wage growth and the impact on inflation dampening demand - the supply issue will keep asking prices up".

In the U.K as a whole, the number of property transactions completed in July 2017 decreased 15.2% when compared with July 2016 and are now at a five-year low, according to the report. "This does point to a lack of broader market momentum and may lead to a softening in price growth as we move into 2018".

Figures from UK Finance, which represents mortgage lenders, showed that activity from first-time buyers has dropped.

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