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House prices soar as 'property market turns corner'

House prices soar as 'property market turns corner'

In a flurry of seemingly upbeat news about the housing market, the Office for National Statistics has reported a surge in prices and the RICS has said that there has been a big pick-up in buyer interest.

According to the ONS, the average UK house price is now £242,000 – up 3.1% on a year ago.

However, there are huge regional variations reported by the ONS for June – and as usual, the ONS puts house values well ahead of the Land Registry, which quotes £162,621 for June and says this is only 0.8% up on the previous year.  

The much more bullish ONS puts houses prices at an average of £251,000 in England, £162,000 in Wales, £130,000 in Northern Ireland and £181,000 in Scotland.

London has the highest average house prices at £425,000, up 8% on a year ago. The North-East has the lowest average house price at £145,000.

Excluding London and the South-East, the average “UK mix-adjusted house price” was £190,000, according to the ONS. Also excluding London and the South-East, UK house prices increased by 1.0% in the 12 months to June.

According to the RICS, the housing market has turned a corner. Although the ONS data points to significant geographic variations, the RICS said that “significant” growth in buyer interest was “seen in each and every part of the UK as the recovery, initially focused in the South-East, spread to regions across the country”.

The RICS also said that, in tandem with rising buyer confidence, more sellers are putting their homes up for sale.

RICS global residential director Peter Bolton King said: “These results are great news of the property market as it looks like at long last a recovery could be around the corner.

“Growth in buyer numbers and prices have been happening in some parts of the country since the beginning of the year, but this is the first time that everywhere has experienced some improvement.”

A total of 315 surveyors took part in the RICS survey, which covers July.

With other headline grabbing news about the housing market – lending to first-time buyers back up to 2007 levels, and 10,000 new homes being purchased under Help to Buy (see next stories) – one agent said that interest rates may have to go up sooner than expected.

Peter Rollings, CEO of Marsh & Parsons, said of the ONS data: “Government initiatives such as Funding for Lending and Help to Buy are fuelling the fire and creating strong demand both from home and abroad.

“Now buyers also have the added security of interest rates being kept at a record low, making mortgages more affordable, which will surely lead to greater demand and activity in both the resale and first-time buyer market.

“But with prices rising so rapidly, Mark Carney’s predictions about interest rates remaining at their present level for at least three years may need to be reconsidered.”