Economy

Annual House Price Growth at 5% in August, Show Official Figures

Analysts believe a rise in the Bank of England base rate is on the cards next month as a result of the latest inflation figures, which have been fuelled by rising house prices.

"Annual price growth has only ticked up slightly, but it's noticeable that on a regional level there are pockets of the country which are experiencing mini property booms", he noted.

Over the same period in London, property sales dropped by 20%, while in Wales, transactions rose by 1.4%.

With much talk of the Bank of England increasing interest rates as early as next month, Ishaan Malhi, chief executive officer of online mortgage broker Trussle, warned that lenders are already increasing their mortgage rates.

Wales shows an annual price increase of 3.4% and a monthly decrease of 0.1%.

Property prices in the United Kingdom increased by 5% in the year to August 2017, taking the average price of a home to £225,956, the latest official index shows.

House price inflation in England alone was 5.3 percent in August.

'This will make securing a first mortgage that bit harder.

"It's testament to the diversity and resilience of the United Kingdom market that this growth is spread across the North West, South West, East and Midlands". Although record low mortgage rates will be helping those who have already stumped up a deposit, escalating house prices will come as yet another blow to aspiring homeowners looking to get their foot on the housing ladder.

The ONS data also shows that sales of United Kingdom properties with a value of £40,000 or greater increased by 6.6% between August 2016 and August 2017 but month on month they fell by 0.5%. This takes the average United Kingdom price to £226,000 in August. These effects were partly offset by clothing prices that rose less strongly than this time previous year.

Prices in the City of London, the heart of the capital's financial district, fell by 5.6% over the year, the biggest fall in the United Kingdom apart from Aberdeenshire. With overall consumer price inflation at 2.7% in August, this means London's house prices declined in real terms.

"The uncertainty over Brexit may be felt more keenly in London than other areas due to the importance of worldwide businesses", said Richard Snook, senior economist at PwC.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says of the figures: "They confirm what we're seeing on the ground - that the market is still showing signs of resilience and prices are holding up well but mainly due to the shortage of stock".

The biggest increase in prices was in the north-west of England, where values were up 6.5% in the year to August 2017. "The East Midlands, South West and Eastern regions all showed growth of 6.4%".



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