In July, house prices rose by 2%, according to the Office for National Statistics (ONS).
Surprisingly, the East and South East of England experienced the strongest growth, rather than London.
The average property price increased by over £1,000 per week, from £277,000 to £282,000 – a new record high and 16.7% above the pre-recession peak of 2007.
However, on a seasonally adjusted basis, average house price growth dropped to 5.2% from 5.7%, partly due to price falls in Scotland and the North East of England.
The ONS data corresponds with more recent figures from Halifax, which reveal a 2.7% increase in prices during August. The two sets of statistics will cause fresh concern regarding housing affordability.
The new shadow housing minister in Jeremy Corbyn’s cabinet, John Healey, tweeted on his appointment: “Housing is now a national crisis, so delighted housing now has full status in shadow cabinet and to take on job.”1
Labour’s new London mayoral candidate, Sadiq Khan, has also made housing a priority, putting “an affordable and secure home to rent or buy”1 as his main priority in his acceptance speech.
Affordability is currently worst in the East of England. The ONS found that the annual rate of house price inflation is at 8.3% in the region – the highest in the UK. Second, at 7.4%, is Northern Ireland, which is slowly recovering from a difficult period. The South East’s house prices are up 6.7% over the last year.
However, the figures also highlight a severe north-south divide, with the North East of England reporting its first annual price decrease since 2013. The average house price in the region dropped by 0.7% over the past 12 months.
Prices in Scotland also fell by 1.3%, while in Wales, prices rose only slightly, by 0.3%.
The ONS states that summer is usually an active time in the property market and if the figures are seasonally adjusted, the monthly pace of house price growth is 0.8%, not 2%.
Chief Executive of housing charity Shelter, Campbell Robb, says: “Not addressing our dramatic shortage of homes is pushing house prices higher and higher, and a stable home further out of reach for millions of young people and families.
“Instead, they’re trapped in expensive and insecure private renting, or stuck in childhood bedrooms.”1
1 http://www.theguardian.com/money/2015/sep/15/uk-house-prices-rise-2-per-cent-july-2015