House prices in the UK jumped for the fourth month in a row leading to November 2015, research by the Office for National Statistics (ONS) has found.
In the 12 months prior to this date, house prices saw an average increase of 7.7%.
In comparison, the average annual wage has seen growth of just 2.5%, which is less than a third of the hike in house prices.
Lack of supply and a rising demand
In the space of just one month from October to November 2015, house prices rose 0.7%. This jump is likely fuelled by the shortage of available homes on the market paired with a rising demand for property, the ONS suggest. This could mean sellers are listing their homes for higher prices in response to the increased demand.
After a relatively slow start to the year in terms of house prices, things started to pick up in the autumn - with four months of consecutive house price growth leading to November 2015. Although autumn is typically a quieter time of year for house price growth, unusually this year there was a steep rise over this period.
The Southern price push
According to the ONS research, the average UK house price now rests at £288,000 - a record high. However, before you shelve any plans you had to move entirely, it’s the prices in the South and East that appear to be driving the entire country’s average up.
In the year leading to November 2015, the East of England saw the highest rise in house prices, leading with a 10.2% increase. The South East was next, with a rise of 9.8%.
Greater London prices, on the other hand, while rising by 7.7% in the 12 months running up to October 2015, jumped up by 2.1% in just one month from October to November 2015 – resulting in a total annual increase of 9.8%.
In stark contrast, Scotland and the North East of England saw the lowest annual house price growth, both witnessing just a 0.4% rise. You can see how regional house prices have been effected in the table below:
Price rise (the year to November 2015)
South East England
North West England
Yorkshire & the Humberside
North East England
While this talk of house prices rising while wages fail to play catch up can be daunting, it’s important to remember that it’s mainly the South East – and London in particular – that’s witnessing dramatic price growth.
Elsewhere, the increase is relatively steady. If you exclude London and the South East, England’s house price rise rests at a stable 5.8%.
If you’re currently house hunting in the South East, you could consider looking at property elsewhere in the country to keep your options open and maybe save some money. You may find you can get more bang for your buck in a region where house prices are rising at a much slower rate.
Disclaimer: All information and links are correct at the time of publishing.