‘Relative stability’ over the Summer as house prices continue to climb

UK HPI indicates +8.4% annual property price inflation

Prices across the country climbed by 1.3% in August, taking the annual rate of property inflation up to +8.4% (from +8% a month earlier), according to the latest UK House Price Index. The Eastern region leads the charge, posting +13.3% annual growth, followed by the South East (+12.2%) and London (+12.1%).

“Housing market indicators for August suggested a period of relative stability during the month,” say ONS analysts; “although demand and supply was broadly unchanged compared to the previous month, the indicators remained somewhat weaker than in 2015 and early 2016.” The average price of a home in the UK crept up to £218,964 in August.

In terms of housing demand, the volume of lending approvals for house purchases fell slightly in August compared to July, remaining at levels seen in early 2015. Home sales in the UK stayed stable between July and August but remain below levels seen in 2014, 2015 and before the stamp duty changes in early 2016. The RICS market survey for the same period – August – reported falling new buyer enquiries over the past three months, with demand from buy-to-let investors falling more sharply than demand from first time buyers and existing owners.

Annual house price rates of change, UK all dwellings from January 2006 to August 2016

12 month percentage change; not seasonally adjusted

annual-house-price-rates-of-change-uk-all-dwellings-from-january-2006-to-august-2016

Average UK house price, January 2005 to August 2016

average-uk-house-price-january-2005-to-august-2016

The main contribution to the increase in UK house prices came from England, where house prices increased by 9.2% over the year to August 2016, with the average price in England now £236,000. Wales saw house prices increase by 2.7% over the last 12 months to stand at £145,000. In Scotland, the average price increased by 4.3% over the year to stand at £145,000. The average price in Northern Ireland is currently £123,000.

Average house price, by UK country, January 2005 to August 2016

average-house-price-by-uk-country-january-2005-to-august-2016

The East of England is the region which showed the highest annual growth, with prices increasing by 13.3% in the year to August 2016. Growth in the South East was second highest at 12.2%, followed by London at 12.1%. The lowest annual growth was in the North East, where prices increased by 3.0% over the year.

Average house price, by English region, January 2004 to August 2016

average-house-price-by-english-region-january-2004-to-august-2016

All dwellings annual house price rates of change, year to August 2016: by English region

all-dwellings-annual-house-price-rates-of-change-year-to-august-2016-by-english-region

Top and bottom 5 UK local authority districts by annual growth in the year to August 2016

Top 5 Local Authorities

% change

Average Price (£)

Newham

23.7

372,897

South Bucks

23.6

661,295

Basildon

21.5

294,369

Shetland Islands

20.8

149,490

Thurrock

20.6

257,297

Bottom 5 Local Authorities

% change

Average Price (£)

City of Aberdeen

-8.7

175,922

Hartlepool

-6.7

98,327

Dumfries and Galloway

-3.2

118,168

Camden

-2.7

797,901

Gwynedd

-1.9

146,138