UK house prices grew by an average of 7% over the past year, according to new figures released by the Office for National Statistics (ONS).
This strong growth means that the average house in England is now worth £300,000, with the average house price for the UK as a whole at £287,000. If you’re thinking about remortgaging, this news will probably be welcome as it could mean that your home is now worth more than when you bought it. However, if you’re a first-time buyer, this latest rise just makes it that much harder to save your deposit and afford the mortgage you’ll need to buy.
In October, UK home prices grew by an average of 0.8%, putting the total house inflation rate for the year so far at 7%. This means that if your home was worth £100,000 a year ago, it could be now worth £107,000. The house price increase was driven by growth in eastern England, where prices rose by an average of 10.4% in a year and in the south east, where they grew by 9.5%.
According to the ONS stats, average house prices have now risen for three months, showing that this recent growth isn’t just a blip – house prices are going from strength to strength. However, the headline figures may not paint a true picture of the value of homes across the UK as a whole.
House price imbalance
With the average house in the UK now worth £287,000, it would seem that house prices for the country are riding high. But when you take into consideration that the average house price for London is £531,000, it is clear that the figures are skewed by the price of property in the capital. If London and the south East are excluded from the stats, the average house price for the UK is £217,000 – which might be more representative of the country.
The rapid growth in house prices in London is due to a shortage of affordable homes in the city and the surrounding areas. It’s a case of supply and demand – there are still a lot of people wanting to buy in London but with not enough properties, it means that the homes that are there sell for a premium.
In Scotland, the average house price is £196,000 while those living in Wales will pay an average of £174,000 for a property. Northern Ireland had the lowest average property prices, at just £158,000. However, house prices in Northern Ireland have increased 10.3% over the past 12 months, so they are starting to catch up to the rest of the UK. If you live in Northern Ireland, these figures could mean that now is a good time to remortgage.
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