Business

House prices continue to outstrip inflation rate

Houses Image copyright PA
Image caption House price rises have slowed in recent months, surveys suggest

The annual rise in UK house prices slowed in October, official figures show, but prices still went up much faster than the general cost of living.

UK property prices increased by 10.4% annually in October, down from 12.1% the previous month, the Office for National Statistics (ONS) said.

The average home in the UK was valued at £271,000, the ONS said.

This comes on the day that the ONS reported the rate of inflation stood at just 1% in November.

This was the lowest level for the Consumer Prices Index (CPI) measure of inflation for 12 years.

Annual house price rises were fastest in England at 10.8%, followed by 5.7% in Wales, 4.9% in Scotland and 4.9% in Northern Ireland.

Regionally, increases were driven by London, which saw prices rise year-on-year by 17.2%. They increased by 11.9% in the South East of England and by 9.6% in the East of England.

"There is still momentum in the market although it is definitely slowing," said Mark Harris, chief executive of mortgage broker SPF Private Clients.

This has been echoed by figures in various other surveys. Mortgage lenders Nationwide and Halifax have both reported a slowdown in the UK housing market in recent months.

The ONS said that the slowest annual increase was a 3.9% rise in the North East of England.

It also said that first-time buyers were seeing sharper house price rises compared with owners moving home.

Prices paid by first-time buyers were 12% higher on average in October compared with a year earlier. Existing owners saw prices increase by 9.7%, on average, over the same period.

"This is yet another blow to the millions of young people and families desperate to build a stable future in a home of their own," said Campbell Robb, chief executive of Shelter.

"With the average house in England now costing more than ten times the average wage, millions of people are finding themselves stuck in the rent trap with little hope of ever saving for a deposit."

He called for a greater number of affordable homes to be built.

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