United Kingdom house prices up 6.1%, says ONS

Between August and September, prices rose 0.8 per cent on a seasonally-adjusted basis, with first-time buyers found themselves paying an average of 4.3 per cent higher than in September past year.

Separately, the Land Registry for England and Wales announced that prices were up by 5.6% in the year to October.

In the prime London and prime country markets higher transaction costs will continue to weigh on activity and price growth in 2016 as the market absorbs stamp duty. The average home in London now sells for 531,000 pounds, after gaining 7.2 percent in the 12 months through September, the data shows, as a rising population and a shortage of homes drives values higher. Given the increase in demand, and that supply remains limited, we expect house price growth to climb further in the final quarter of the year.

Annual house price increases in England were driven by an annual increase in the east (8.4 per cent) and the south east (7.4 per cent).

Prime central London prices are forecast to rise by two per cent in 2016 and by 20.5 per cent cumulatively by 2020.

The annual rate of house-price inflation in London was 5.4 percent in August, the ONS said.

In Wales, the average house price is £175,000, while in Scotland it is £199,000.

“There is an increasing number of options for first-time buyers with many lenders offering high loan-to-value deals. However, with the average price paid by a first-time buyer now £216,000, that still means saving at least £11,000 for a deposit, plus moving costs, and a salary of around £50,000”.

Shelter chief executive, Campbell Robb, said: “Every monthly price hike is yet another blow for the millions of people whose dreams of home of their own have all but disappeared”. The ONS does not say how numerous buyers were couples with joint incomes. Halifax has previously said that house prices rose by 8.6% over the same period, while Nationwide said the rise was just 3.8%.

However, a Department for Communities and Local Government spokesman said: “We have got Britain building again, with the latest figures showing a 25 per cent increase in the number of new homes over the past year”.