House prices in the UK have reached an all time high and now stand at an average of £247,000, an increase of 3.8 per cent in the 12 months to August 2013, according to statistics from the Office for National Statistics.
The year-on-year increase reflected growth of 4.1 per cent in England, 1.1 per cent in Northern Ireland and 1 per cent in Wales, offset by a fall of 0.7 per cent in Scotland.
Prices in London increased faster than elsewhere, jumping 8.7 per cent to £437,000 in August.
David Brown, commercial director of LSL Property Services, comments: “There’s an air of bullish confidence surrounding the housing market at the moment. Prices are at record highs, demand is bubbling away nicely, and both borrowers and lenders seem to be convinced the economic downturn is well and truly a thing of the past. There are sure signs that the economy is on-track towards a complete recovery.
“Such fervent consumer demand must also be satisfied by an increase in the supply of affordable homes if we are to maintain accessibility and avoid prices rising beyond reach of aspirational homeowners.
“Despite the greater mortgage availability, some may hold off on entering the market for the time being, in a bid to see wages increase and accrue a little more savings – something that has been significantly helped by the healthy state of the private rental market, which has seen relatively low inflation in recent months.”
Andy Knee, chief executive of LMS, said: “Although London continues to be a focal point of activity, experiencing a rate of growth more than double that of the next best performing region (Midlands, +3.7 per cent), this should not overshadow the fact that all regions apart from Scotland have witnessed a rise in the average house price over the past year. These figures show that there is not a ‘bubble’, but rather that there is a national upward trend being experienced by almost everyone.
“There are several reasons why house prices are continuing to rise. Not only are mortgage rates currently at their lowest level but high rents and low returns on savings mean that an increasing number of people are turning to property as a means of investment. First-time buyers are competing with buy-to-let landlords for a very limited supply of houses. Until more houses are built and a sense of equilibrium is restored between supply and demand, prices will inevitably continue to rise.”
