House prices SOAR by 12%: The biggest annual rise in value in TEN years
HOUSE prices are rising at their fastest rate in almost a decade with a £29,000 jump recorded over the past year.
By Sarah O'Grady
A house with a 'for sale' sign GETTY
House prices have soared this year
The value of the average family home in England and Wales is now above £280,000 for the first time, latest figures show.
The annual increase of £29,339 means houses are earning more in a year than the average worker, who earns £27,271.
More than 60 per cent of the working population earned less than the average home in the past 12 months, the Centre for Economics and Business Research found.
A typical home’s earnings now outpace those of a number of professions and significantly exceed the starting salaries of a junior hospital doctor (£22,636), a graduate nurse (£21,388), a teacher (£22,023), a police officer (£23,317) and a soldier (£17,945).
The study, commissioned by the Post Office, shows prices rose by 12 per cent between September 2013 and September this year.
This is the strongest rate of annual growth for almost a decade
David Newnes, Estate agents director
John Willcock, head of mortgages at the Post Office, said: “Property prices have soared over the past year following a long period of recovery and are set to increase further over the next five years.
“While this is good news for those who already own their home, our study highlights the struggle that buyers and movers looking to climb the property ladder face, especially in getting on that all-important first rung.”
Another report yesterday showed property values in England and Wales up £28,560 or 11.3 per cent year on year since November 2013. Last month the average price paid for a home was £280,733 – an increase of £2,277 on October, according to LSL Property Services/Acadata.
The year-on-year rise is the biggest since 2005, according to its data.
David Newnes, director of Reeds Rains and Your Move estate agents, part of the group, said: “Annual house price growth has more than doubled over the past 12 months, accelerating from 5.4 per cent in November 2013.
“This is the strongest rate of annual growth for almost a decade and the considerable uplift in values has pushed the average price of a home in England and Wales above £280,000 for the first time.”
Mr Newnes expects George Osborne’s reform of stamp duty, announced in last week’s Autumn Statement, to boost the market.
He said: “Breaking up the outdated and unloved slab system of stamp duty should allow activity to build further at the bottom rungs of the ladder, facilitating hefty savings for buyers.
“This should help erode the up-front barriers of purchasing a home for the significant majority of buyers – and sellers may feel the benefit of weightier demand, as well as being able to price their homes more realistically without having to negotiate threshold barriers.”
The changes, which took effect immediately, mean buyers no longer pay a flat rate of tax on the whole price of a property but a tiered rate.
On a property costing £275,000 buyers will pay £4,500 less tax than under the previous system.
The Acadata analysis estimates that the number of housing transactions in england and Wales last month, as recorded by the Land Registry, will total some 70,500 – 20 per cent lower than in October.
A typical reduction at this time of year would be two per cent.
Dr Peter Williams, chairman of Acadata, said: “This is the first time in 20 months that we estimate sales volumes will have fallen below those achieved in the same month one year earlier.
It will be interesting to see whether the new stamp duty levels, which favour those buying houses priced below £937,500, will result in an increase in transactions in the new year.”
The number of loans to first-time buyers in October was up 14 per cent year on year, according to figures from the Council of Mortgage Lenders.
Director-general Paul Smee said: “This has been a year of change for our industry but the market has shown remarkable stability.”