House Price Inflation Reached 10.5% in May
ONS figures show highest level of national house price appreciation in four years.
Recent indications that the housing market is beginning to cool may be nothing more than a false dawn, according to the Office for National Statistics.
Figures released by the ONS today show that national house price inflation went up by 0.6% in May from the 9.9% level of year on year rise reached in April.
Once again, the figures show that the housing boom continues to be led by London, with house price appreciation in the capital standing at a staggering 20.1%, the steepest increase in house prices since records began twelve years ago.
The ONS figures also show that it is not just London that is experiencing high house price inflation. Prices rose by 9.6% in the South East, 8.6% in the East and 7.1% in the South West.
However, there is a growing disparity between levels of growth in the South and the North of the country. Prices in the North East rose by 4.8% and in the North West they went up by less: 3.9%. However, the fact remains that once the housing market hotbed of London and the South East is excluded, annual house price inflation across the rest of the UK still stands at 6.4%, its highest rate since 2010.
Additionally, just two months ahead of the historic referendum on Scottish independence, there seems to be a clear distinction in house price growth between the UK’s constituent nations. House buyers in England paid 11% more in May than they did during the same month in 2013, in Wales this figure drops to 6.5%, whilst in Scotland the rate of year on year house price inflation was 3.6% in May. In Northern Ireland house prices actually depreciated by 0.7% in the same time frame.
The ONS index now places the average house value in the UK at £262,000, while the average house in London now costs an eye-watering £492,000, validating a recent PwC report that predicted average prices in the capital would exceed half a million pounds by the end of the year.
Given the overall impression gleaned from these official statistics, the Governor of the Bank of England Mark Carney, who is currently being quizzed by the Treasury Select Committee on his efforts to curb rising house prices, may well have more cause for concern by the time today is over.
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