UK house prices increased by 10.5 per cent in the year to May, up from 9.9 per cent in the year to April, according to the Office of National Statistics (ONS).
The office’s House Price Index for May, released today, shows this is the highest annual increase since May 2010 when prices rose by 10.6 per cent.
House price growth is strong across most parts of the UK, with London again showing the highest growth. The capital saw a record annual increase of 20.1 per cent, while solid increases also occurred in the south east (9.6 per cent) and east (8.6 per cent).
The ONS figures show that on a seasonally adjusted basis, average house prices increased by 0.8 per cent between April and May.
By country, house prices rose by 11 per cent in England, 6.5 per cent in Wales and 3.6 per cent in Scotland and fell by 0.7 per cent in Northern Ireland in the year to May.
Excluding London and the south east, UK house prices increased by 6.4 per cent in the year.
Richard Sexton, director of e.surv chartered surveyors, said despite high prices the appetite for property was still strong, especially among first-time buyers.
“Lending to high loan-to-value borrowers hit a post-crisis record in June. And as prices rise, more buyers are being forced to take out proportionally larger loans – or face being left on the sidelines.
“Fortunately, lenders are offering far more options to support those looking to get onto the ladder, recognising the importance of keeping the bottom of the market accessible.”
Increasing demand for homes in London was partly due to pressure from foreign investors and landlords, he said.
“Removing London from the frame reveals a much calmer outlook. Across the market, although prices are still rising, total home lending is beginning to stabilise. But to really make a difference, house building must be up-scaled in order to ensure there is enough property to satisfy demand.”
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