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UK House Prices Increased by 3.1% Show Latest Government Figures

The latest figures from the Office of National Statistics have shown a surge in UK house prices in the twelve months leading to the end of June. There has been an increase of 3.1% in the year leading to June 2013, a step up on the 2.9% increase in the twelve months leading to May of this year.

The house price growth is relatively stable across the UK, but prices in London are growing more rapidly and are fast succeeding the UK average for asking prices. Annually, England house prices increased by 3.3% whilst prices rose by 4.3% in Wales. Prices rose by 0.9% in Scotland and by 0.4% in Northern Ireland. The house price rise in England has been driven mainly by London’s figures, which have reached record highs over the last year. Overall, prices in London increased by 8.1% whereas they rose by 3.1% in the West Midlands. House prices in the South East increased by 2.9%. Not including London and the South East, house prices rose by 1% in the twelve months leading to June.

For existing home owners, prices rose by 2.7% in June 2013 when compared to June 2012. There was a rise of 3.9% in the prices paid by first time buyers over the same time period. The increase is prominent all over the UK, even when London and the South East is excluded showing positive improvement in the housing market as a whole. In addition, borrowers can expect to take advantage of the low Bank of England base rate until at least 2016, meaning that mortgage deals will continue to be more attractive.

The Royal Institute of Chartered Surveyors recently published a report showing that housing market activity has increased throughout the UK. While the primary focus of the housing market was London and the South East, the North East and the West Midlands have shown the biggest increases in buyer activity this July. As a result of the new demand in these areas, the rise in house prices has been more prominent. However, London has still shown the highest increase at 8.1% annually due to the interest of international as well as domestic markets.

In order to continue the recent success in the housing market, economists have warned that supply has to meet demand. The interest of new buyers due to the Funding for Lending scheme and the Help to Buy scheme has caused a surge in demand meaning that house builders may need to come into action in order to restore the housing market balance.

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