House prices in the UK rose by 5.5 per cent in October, compared to the same month the previous year, figures from the Office for National Statistics (ONS) found in its House Price Index.
The year-on-year increase reflected growth of 5.7 per cent in England, 2 per cent in Wales, 3.3 per cent in Scotland and 4.8 per cent in Northern Ireland.
As was predicted, house prices in London increased at a faster rate than the UK average, up 12 per cent in October.
Between September and October house prices were up 1.4 per cent on a seasonally adjusted basis, while prices paid by first-time buyers in October were 5.9 per cent higher on average than in October 2012.
Speaking about the house price figures Andy Knee, chief executive of LMS, said: “The property market is continuing to accelerate with average prices up 5.5 per cent from a year ago.
“Surging values are still being driven by the buoyancy of the market in London, however, with peoples’ appetite for property growing and demand for homes increasing, there is increasing pressure on the already limited supply of houses across the UK. The drastic shortage of homes will need to be addressed by the Government to prevent prices rising beyond reach.
“The steadfast climb we’ve seen throughout 2013 is set to continue into the New Year, with lending levels, driven by the array of accessible rates on offer, almost certain to follow suit. However, there is a risk that The Bank of England will be forced to apply the brakes sooner than most commentators expect through a rise in interest rates and that the introduction of new regulations in April will act as a speed bump to the accelerating market.”
Richard Sexton, director of e.surv chartered surveyors, commented: “Collectively the property market is singing a sweet tune, with prices picking up across the country – although London remains the driving force behind the large annual jump. Monthly home loans have topped the 70,000 mark for the first time since the recession, and the mortgage market is becoming much more accessible, as lending to borrowers with small deposits has doubled in the past year.
“We must keep a tight rein on the recovery of the market, to ensure prices remain affordable for all. Help to Buy is extending a helping hand to lower equity buyers, and helping them build a deposit. Many parents are also digging deep to help their offspring stump up a decent deposit, although the high cost of living is continuing to chip away at household finances. But to get to the crux of the matter, the volume of house-building needs to be dramatically increased, particularly in the capital, where the competition for homes is forcing house prices up at a rapid rate.”
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