House Prices Rise - Property market experts blamed a failure to build sufficient houses for the continuing rise in prices despite falling real incomes
The rate of house price growth increased to 5% in August, according to official government figures, pushing homes further out of the reach of aspiring young buyers already squeezed by rising inflation. The average UK house price rose by £1,000 in August to reach £226,000, the Office for National Statistics (ONS) said. The increase took the annualised rate of house price inflation to 5%, up from 4.5% in July and more than double the rate of pay settlements across the country. The biggest increase in prices was in the north-west of England, where values were up 6.5% in the year to August 2017. The east of England, east Midlands and south-west all saw rises of 6.4%. But price rises have slowed to a crawl in London, which had the lowest regional increase with a gain of 2.6%. Prices in the City of London, the heart of the capital's financial district, fell by 5.6% over the year, the biggest fall in the UK apart from Aberdeenshire. While the low oil price has hit communities dependent on the North Sea oil industry, Brexit is believed to have affected prices in the capital. However the ONS figures underline the enormous differences in property prices across the UK. In August 2017, the most expensive borough to live in in the UK was Kensington and Chelsea, where the cost of an average house was £1.2m. In contrast, the cheapest area to purchase a property was Blaenau Gwent, where an average house cost £82,000.
Jeremy Duncombe, of Legal & General Mortgage Club, said: Annual prices are consistently rising as more buyers chase fewer properties. Escalated by a critical lack of housing stock, this trend is only set to continue if more affordable housing is not built. As speculation around the autumn budget begins to build up, we hope there will be a genuine answer to boost supply that gives everyone a realistic chance to own a home. Even buy-to-let promoters, which traditionally argue in favour of higher house prices, said the current rate of inflation was leaving young people excluded from the market. John Goodall, of the buy-to-let specialist Landbay, said: Although record low mortgage rates will be helping those who have already stumped up a deposit, escalating house prices will come as yet another blow to aspiring homeowners looking to get their foot on the housing ladder. It is essential that the government doesn't lose focus on addressing the housing crisis and makes good on its promise to build the thousands of new, affordable homes that people desperately need.
Richard Snook, senior economist at PwC, said: The uncertainty over Brexit may be felt more keenly in London than other areas due to the importance of international businesses. House Prices Rise - Rising mortgage rates “ and the possibility of an interest rate rise from the Bank of England to quell inflation “ are likely to dampen further house price rises. In recent weeks many of the major mortgage providers have increased the price of two-year and five-year fixed-rate deals in anticipation of an official rate rise. Read our article on how Home Surveys can save you money Source: www.theguardian.com