UK house prices rose by 8.7 per cent in the year to June, pushing the average price to £213,927, according to the Land Registry’s latest official figures published today.
On a monthly basis, average prices rose by 0.8 per cent between May and June.
London’s property prices continued their double-digit growth, rising 12.6 per cent in the year to June, taking prices to £472,204.
However, the biggest price gains were in the East of England, where the average property is now £270,029, 14.3 per cent more than a year ago.
Annual house price growth was weakest in the North East, where average prices fell slightly over the last month to £124,470.
House prices showed little sign of slowing in June, despite speculation that political uncertainty surrounding Brexit would rattle buyers’ nerves, according to some property experts.
But separate surveys, which have covered the month of July, have signalled that property demand has started to cool. The Royal Institution of Chartered Surveyors (RICS), for example, has revealed just 5 per cent of surveyors reported a rise in prices across the UK in July - down from 15 per cent in June.
The firm also said buyer enquiries, agreed sales and housing stock levels all fell significantly in the three months to the end of July.
Andy Knee of property advisers LMS says: ‘The £17,000 increase in the average house price puts savings returns to shame in the current low interest rate environment, and leaves many homeowners with significantly more equity at their disposal than a year ago.
‘Although the longer-term impact of the vote to leave the EU on house prices remains to be seen, we expect consumer demand to remain high. Appetite for housing continues to outweigh supply, following a modest 1.8% increase in new-build housing output for the second quarter of 2016, and only by tackling this will buyers see a respite in the cost of housing.’
He adds that the recent base rate cut to 0.25% could further fuel buyers’ budgets, pushing house prices ever higher.
Though price growth remains strong, overall housing transactions dipped slightly in the second quarter of 2016 because of a last-minute surge in purchases in March, as investors rushed to avoid the new stamp duty on buy-to-let properties and second homes.
In March, 171,000 properties were sold, according to HMRC, almost 100,000 more than in April when transactions dropped to 73,370 - the lowest in at least a year.
However, since then transactions have rebounded and monthly transactions broke through the 100,000 a month barrier in June.
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