House Prices Up by 5.4% in the Year to September, Official Data Shows

The average house price in the UK was up by 5.4% in the year to September, according to the latest official data from the Office for National Statistics (ONS) and Land Registry. This is higher than the 4.8% rate of growth recorded in August, but is broadly in line with the increases seen during the year so far.

This rise took the average UK house price to £226,000 in September – £11,000 higher than in September 2016 and £1,000 up on August 2017.

By country

The main contribution to this rate of growth was England, where the average property value increased by 5.7% over the 12 months to September, taking typical house prices to £244,000. In Wales, the average rise of 5.3% took property values to £153,000. Following a 3.1% increase in Scotland, the typical house price is now £145,000. In Northern Ireland, the average property value is £132,000, following a rise of 6.0% in the year to the third quarter (Q3) of the year.

Regionally

On a regional basis, London continued to boast the highest average house price, at £484,000, followed by the South East and East of England, which stood at £324,000 and £289,000 respectively. The lowest average price continued to be in the North East, at £130,000.

The North West experienced the highest rate of annual house price growth in September, at an average of 7.3%. This was followed by the South West (6.6%) and East Midlands (6.4%). The lowest annual increase was recorded in London, where the average price rose by 2.5% over the 12 months to September, followed by the North East, ay 4.4%.

By local authority

The largest annual growth of any local authority in the UK in the year to September was seen in Hinckley and Bosworth, where the average property value increased by 15.9% to stand at £215,000. By contrast, the lowest rise was recorded in Halton, where prices actually dropped by an average of 5.2% to hit £127,000.

In September, the most expensive area to buy a property was the Royal London Borough of Kensington and Chelsea, where the average home costs £1.2m. The cheapest location to purchase a home was Blaenau Gwent, at an average value of £85,000.

Comments 

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, comments on the index: “The market has continued to splutter along, registering yet more marginal positive price growth despite a sustainably lower level of buyer demand. This is certainly promising for those on the ladder and we should see a large degree of stability return, with a heightened level of buyer interest come January.

“It is yet to be seen what, if any, impact the marginal increase in interest rates will have. It is likely that, while many will sit back and see through the Christmas period as a result, there will be no medium to long-term impact on the UK’s appetite to buy property, with the cost of borrowing still very affordable for the masses.”

Ishaan Malhi, the CEO and Founder of online mortgage broker Trussle, also says: “Many people expressed concern for the housing market after Brexit, but prices are 5.4% higher than they were this time last year. That’s an £11,000 increase on the average UK home. With wages growing just 2.2% in the last 12 months, the growing challenge facing first time buyers is plain to see.

“The Budget is now a little over a week away, and rumours are already swirling about some Government support for first time buyers. If Phillip Hammond proposes to boost housebuilding and make homeownership more affordable for young people, it will be a welcome move for those currently priced out of the market. The mortgage sector is slowly innovating to make the process of buying a home less stressful and time consuming, but, until more housing supply brings down the cost of property, homeownership will remain a pipedream for some.”

We also have the thoughts of Richard Snook, the Senior Economist at PwC: “The trend that has been emerging over the summer and autumn is the rest of the UK outperforming London. Annual price growth in London was just 2.5% in September – far behind the strongest performing regions, the North West (7.3%) and South West (6.6%), and less than half the national average.

“Our latest market projection, published in July, was for growth of between 3% and 5% in 2017, with 4% as the central scenario. Growth for the year is now likely to be around the upper end of this range. The other notable trend is that these price gains are being experienced on increasingly low transaction volumes, which were 15.2% lower in July 2017 than July 2016. This does point to a lack of broader market momentum and may lead to a softening in price growth as we move into 2018.”

John Goodall, the CEO and Co-Founder of buy-to-let specialist Landbay, adds: “House prices showed no signs of slowing down in September, as they continued on in their upward climb. Up until this point, a combination of low mortgage rates and high rates of employment have helped balance out the squeeze on household incomes from stagnant wages and rising inflation. However, last week’s rate rise signalled the start of raised borrowing costs for the first time in a decade, which is likely to curtail buyer activity in the coming months.

“As the Budget draws closer, we hope to see some ironclad commitments from the Government on its plan for tackling the growing demand for housing. There may be no quick fix, but now more than ever, the private rented sector will be relied upon by those unwilling or unable to buy a house outright. Without a radical housebuilding plan for both first time buyer homes and purpose-built rental properties, prices will continue to rise over the coming decades.”