Business

UK house prices rising at 7% a year, says ONS

For Sale signs Image copyright PA

UK house prices continued to grow strongly in October, the Office for National Statistics (ONS) has said.

The cost of the average UK home rose by 0.8% in October, the ONS said, with the annual house price inflation rate rising to 7% from 6.1% in September.

That means that the average UK home now costs £287,000.

House prices have been growing particularly quickly in eastern England, where they rose 10.4% in the past year.

The south east of England also saw rapid growth, with prices up 9.5% over the past 12 months.

The ONS noted that the annual rate of price growth across the whole of the UK had now risen for three months in a row.

"Upwards pressure on house prices may be a result of a shortage of supply and a strengthening of demand in the housing market, a view supported by a number of house market indicators," the ONS said.

"There continues to be weak supply in the market, with the Bank of England's Agents' Summary Conditions for October reporting a shortage of properties available for sale."

The ONS figures are in the middle of a range of those produced by the various leading house price indexes, though all have shown that prices have risen in the past year.

The Nationwide said UK prices rose by 3.7% in the year to November, while rival lender the Halifax said prices were up 9%.

The Land Registry, drawing on its own data, says prices in England and Wales went up 5.6% in the year to October.

'Continuing demand'

Separate figures indicated that mortgage lending continued to grow strongly in October, according to the Council of Mortgage Lenders (CML).

The number of loans made to home buyers rose by 9% in October to 65,300, which was up 3% on a year ago and the second highest number since 2007.

The number of loans to first-time buyers, at 29,900 mortgages, was at its joint-highest total since August 2007, just before the onset of the banking crisis.

Paul Smee, director general of the CML, said: "Home owner and buy-to-let activity have both continued the upward trend seen last month, and the market looks set to finish the year strongly, despite taking time to gain momentum after a slow start to 2015."

"With increasing employment and the current absence of inflationary pressures in the UK, conditions for continuing demand in the housing market seem likely going into the new year."

Campbell Robb, Shelter's chief executive, said: "As house prices continue to rise, more people are losing hope of ever owning their own home and building a stable future for their families."

"Right now, millions of people across the country are stuck in expensive private renting because of our housing shortage, with barely enough money left over each month to pay for essentials, let alone save for a deposit."

Related Internet links

The BBC is not responsible for the content of external Internet sites