House price boom stretches across UK
By Emily Cadman
House prices are experiencing double-digit percentage rises across the UK, led by rampant growth in London, according to official figures.
Prices are “increasing strongly across most parts of the UK”, up 10.5 per cent on the year to May, led by a record annual increase in London of 20.1 per cent.
However, excluding London and the South East, UK house prices rose a more modest 6.4 per cent, the Office for National Statistics found.
The average house in London is now worth £492,000, more than double the £223,000 outside the capital.
While similar rates of growth have been reported in private sector surveys, this is the largest rise in four years for the official data which, as it is based on actual mortgage completions rather than in-house data, often lags behind private sector indices such as thos of Nationwide and Halifax.
However, more recent data for June, such as the Royal Institution of Chartered Surveyors’ monthly survey, has suggested that the market is cooling, with buyer demand in the capital contracting for a second successive month.
William Zimmern, senior economist, at professional services company PwC, said while data showed there was still “strong momentum” in house price growth in London and the South East, he expected price rises to slow into the second half of the year.
John Bulford, economic adviser to the EY Item Club, said falls in other indicators, such as the number of mortgage approvals, suggested that the “heat has started to come out of the market as the mortgage market review changes [which imposed more stringent conditions on borrowers] begin to bite”,
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