In the 12 months to October 2013 UK house prices increased by 5.5%, up from a 3.8% increase in the 12 months to September 2013, according to the Office for National Statistics (ONS).
The year-on-year increase reflected growth of 5.7% in England, 2.0% in Wales, 3.3% in Scotland and 4.8% in Northern Ireland.
The ONS said house price growth is beginning to increase across parts of the UK, with prices in London increasing faster than the UK average.
In October 2013, the UK mix-adjusted House Price Index reached 186.3, surpassing the record level witnessed in August 2013 by 0.2%.
Annual house price increases in England were driven by rises in London (12.0%), the East of England (4.8%) and the West Midlands (4.7%).
Excluding London and the South East, UK house prices increased by 3.1% in the 12 months to October 2013. On a seasonally adjusted basis, average house prices increased by 1.4% between September and October 2013.
In October 2013, prices paid by first-time buyers were 5.9% higher on average than in October 2012. For owner-occupiers (existing owners), prices increased by 5.3% for the same period.
Mark Harris, chief executive of SPF Private Clients, said: “House prices continue to soar in London, with an incredible 12% rise in the 12 months to October. This surge in prices in the capital helped lift overall national growth to 5.5% – or 3.1% once London and the south east are stripped out. This demonstrates the limitations of a national average price as it can mask significant regional differences. While London is a micro market of its own, other parts of the country are seeing far less activity and demand, which is keeping a lid on prices, although house price growth is beginning to increase elsewhere.
“Even though CPI has fallen yet again, fears of an interest rate rise sooner rather than later continue. However, while the economy looks to be improving and unemployment falling, the recovery is still tentative and there is a long way to go. The housing market is still some way off its peak in terms of prices and volume of transactions.
“Mortgage rates remain at rock-bottom and we expect this to continue in the spring despite the repositioning of the FLS monies away from individual mortgages and towards small businesses. Lenders are still very keen to lend with many telling us they are expecting a strong first quarter. This means keeping rates low and competitive, which is good news for borrowers.
“First-time buyers are paying some 5.9% more for a home than in October last year. But with mortgage rates cheaper than they were then, home ownership should be more affordable. However, it is important that buyers plan ahead for potential interest rate rises and ensure they can afford their mortgage once this happens.”
