UK house prices increased by 5.5% in December 2013 compared with a year earlier, up from 5.4% in November 2013, the Office for National Statistics has reported.

This means the average UK house price reached £250,000 in December 2013.

House prices grew by 5.7% in England, 4.8% in Wales, 0.5% in Scotland and 4.8% in Northern Ireland.
House price growth is beginning to increase strongly across parts of the UK, with prices in London increasing at more than double the UK average.

Annual house price increases in England were driven by rises in London (12.3%), the East (4.6%) and the West Midlands (4.3%).

Excluding London and the South East, UK house prices increased by 3.1% in the 12 months to December 2013. On a seasonally adjusted basis, average house prices increased by 0.9% between November and December 2013.

In December 2013, prices paid by first-time buyers were 7.4% higher on average than in December 2012. For owner-occupiers (existing owners), prices increased by 4.7% for the same period.

Stuart Law, CEO of Assetz, said: “Every region of the UK, even those that were previously struggling, is now seeing growth which is a huge confidence boost for the country. Over the next year we will see these regions contributing even more to overall growth and we predict 10% annual growth across the UK in both 2014 and 2015.

“We advise keeping a weather eye on the current property cycle – the ‘top’ is still a distant prospect and the Governor of the Bank of England has given his assurances, albeit with a string of caveats, that base rates will remain at 0.5% until the middle of next year.

“Property investment is still streets ahead compared to any other form of investment returns, however, capital growth in many areas of the country is now overtaking profits from rents which are not keeping up with house prices. Southern investors are broadly unaware of the lucrative yields available in northern markets, at prices that have not yet reflected the price growth of the next cycle.”