London house prices rise nearly 10% in a year

House prices in London have risen by nearly 10% in the last year, adding to signs of a sharp north-south divide in the market.

A 9.7% increase in prices in London over the year to July helped to push the value of homes across England to a new high of £255,000 on average, the Office for National Statistics (ONS) said.

House prices in London and the South East both raced past their 2008 peaks and stood at an average of £438,000 and £303,000 respectively, while prices in the East of England and the South West also edged close to their previous highs.

But the UK market was still patchy and while house prices were up by 3.7% year-on-year in England they dropped by 2% in Scotland and 0.7% in Wales. 

Prices in Northern Ireland were up by 1.8% year-on-year as the market showed signs of starting a slow recovery after some sharp falls following the economic downturn.

The annual pace of house price inflation picked up across the UK in July to its fastest rate recorded in 2013 so far at 3.3%, taking values to £245,000 on average. Prices rose by 0.3% month-on-month.

Peter Rollings, CEO at Marsh & Parsons, comments: “A strong recovery is evident across much of the UK as house prices continue to rise at their fastest rate in many years.  The market is helped by an improving economy, low interest rates, and government-backed schemes such as Help to Buy. But while the market buoyancy is clear, any talk of a housing bubble is wide of the mark. 

"Prices in most parts of the country are still well below the market highs of 2007, and the recovery in many parts of the UK is relatively muted. Ultimately, house prices can only increase at a rate that people can afford – so while wages remain low, and lending continues to be checked, there is a limit to how high house prices can rise.

 “However the London property market tells a different story, with price increases that dwarf those in the rest of the UK.  In the Prime London property market, an imbalance of supply and demand means that prices rise faster than in other areas.  

"The huge demand for property in the most desirable parts of the capital, from both UK and overseas buyers, is helping to push prices higher. In the three months to June, we recorded 11% more buyers entering the market in competition for 14% fewer properties. Property is changing hands in record time and for close to the asking price, with 98% of the asking price for Prime London property regularly being achieved.”

UK house prices rise 2.9% in last 12 months

• Office of National Statistics House Price Report
• KEY POINTS:
• In the 12 months to May 2013 UK house prices increased by 2.9%, up from a 2.6% increase in the 12 months to April 2013.

• House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average.

• The year-on-year increase reflected growth of 3.1% in England, 0.8% in Scotland, 0.6% in Wales and 1.9% in Northern Ireland.

• May 2013 is the first month that Northern Ireland house prices have grown year-on-year since February 2008.

• Annual house price increases in England were driven by a 6.6% rise in London and a 2.7% increase in both the North West and the West Midlands.

• Excluding London and the South East, UK house prices increased by 1.9% in the 12 months to May 2013.

• On a seasonally adjusted basis, UK house prices increased by 0.3% between April and May 2013.

• In May 2013, prices paid by first-time buyers were 4.1% higher on average than in May 2012. For owner-occupiers (existing owners) prices increased by 2.5% for the same period. 

Average mix-adjusted house prices in May 2013 stood at £248,000 in England, £157,000 in Wales, £134,000 in Northern Ireland and £180,000 in Scotland.

In May 2013, London continues to be the English region with the highest average house price at £416,000. The North East had the lowest average house price at £144,000. London, the South East and the East of England all had prices higher than the UK average price of £239,000.

Excluding London and the South East, the average UK mix-adjusted house price was £189,000.

Latest house price date from Office of National Statistics

The ONS released their latest house price statistics today with more evidence that the housing market is starting to pick up pace pace in England and Wales, with London leading the way.

Key points from ONS today

• In the 12 months to March 2013 UK house prices increased by 2.7%, up from a 1.9% increase in the 12 months to February 2013.
• House price growth remains stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
• The year-on-year increase reflected growth of 3.0% in England and 1.2% in Wales, which were offset by declines of 1.7% in Scotland and 2.0% in Northern Ireland.
• Annual house price increases in England were driven by a 7.6% rise in London and a 3.3% increase in the South East. The East saw a 2.8% increase, West Midlands 2%, North East 1.8%, East Midlands 0.3%, North West unchanged, while in the South West prices fell 0.3%.
• Excluding London and the South East, UK house prices increased by 0.6% in the 12 months to March 2013.
• On a seasonally adjusted basis, UK house prices increased by 0.4% between February and March 2013.
• In March 2013, prices paid by first-time buyers were 1.3% higher on average than in March 2012. For owner-occupiers (existing owners) prices increased by 3.2% for the same period.  

Average house prices in countries and regions

Average mix-adjusted house prices in March 2013 stood at £244,000 in England, £157,000 in Wales, £130,000 in Northern Ireland and £178,000 in Scotland.

In March 2013, London continues to be the English region with the highest average house price at £398,000. The North East had the lowest average house price at £144,000. London, the South East and the East of England all had prices higher than the UK average price of £235,000.

House Price Index by type of buyer

The average price for properties bought by first-time buyers increased by 1.3% over the year to March 2013, down from an increase of 1.6% in February 2013. During March 2013 the average price paid for a house by a first-time buyer was £175,000.
The average price for properties bought by former owner-occupiers (existing owners) increased by 3.2% in the year to March 2013, up from an increase of 2.0% in February 2013. In March 2013, the average price paid for a house by a former owner-occupier was £270,000.

House Price Index by new and pre-owned dwellings

During the year to March 2013 prices paid for new dwellings increased by 1.0% on average, compared with a decrease of 0.3% in the year to February 2013. The average UK house price for new dwellings in March 2013 was £230,000.
During the year to March 2013 prices paid for pre-owned dwellings increased by 2.8% on average, compared with an increase of 2.0% in the year to February 2013.