‘Strong Growth’ As UK House Prices Rise 8.2%
House prices increased by 8.2% in the year to April, according to a revamped index by the Office for National Statistics (ONS).
The rise has been described as a continuation of the “strong growth” seen in property prices over the past two-and-a-half years.
According to the ONS index, which uses data from several sources, the average UK house price is significantly lower than suggested under the old method.
The ONS now says the typical value of a UK property is £209,054 – £83,000 less than what was recorded using the former index in March.
London property prices have also taken a hit under the new measurement and are now back under the half a million pound mark at £470,000, considerably less than the old estimate of £552,000.
A different formula is now being used to calculate prices which “is not as sensitive to extreme valued property”, meaning results are less likely to be artificially inflated by expensive properties.
As this is the first time this index has been released, it is being described by the ONS as an “experimental official statistic” for now.
Even though average house prices have been revised down, many areas have enjoyed growth over the past 12 months – and London continues to be the fastest growing region, with prices increasing by 14.5% in the year to April.
In local authority areas, it was good news for the City of London (27.3% growth) and Slough (25.2% growth), with the Berkshire town’s property market buoyed by the imminent arrival of Crossrail, a new high-capacity railway route to London.
Meanwhile, Merthyr Tydfil in Wales saw an 11.1% slump in house prices.
Burnley in Lancashire is the cheapest place to buy a property in the UK, with the typical house costing just £73,000.
Howard Archer of IHS Global Insight said increases in stamp duty for buy-to-let investors and the upcoming EU referendum had dampened activity on the housing market, but added that the ongoing supply shortage would “likely provide support to house prices”.