House prices in the UK increased by 0.8% in June compared to the previous month and by 4.9% year on year taking the average value to £223,257, the latest official figures show.
The growth is being led by England where prices increased by 0.8% month and month and 5.2% year on year to £240,325, according to the figures published by the Land Registry.
Wales recorded strong month on month growth with prices rising by 2.9% in June and saw annual growth of 3.6% to £151,672 while in Scotland growth was lower at 0.1% month on month and by 2.9% year on year to an average of £144,253.
In London prices fell by 0.7% month on month but are still up 2.9% compared to June 2016 with the average house priced at £481,556, the highest in the country.
The East of England recorded the greatest increase in average property price over the last 12 months with a rise of 7.2% while Yorkshire and the Humber experienced the greatest monthly price growth with an increase of 2.2%
The data also shows that the North East saw the lowest annual price growth with an increase of 2.5% and London saw the most significant monthly price fall of 0.7%.
The UK Property Transaction statistics showed that in June 2017 the number of seasonally adjusted property transactions completed in the UK with a value of £40,000 or above increased by 1% compared with June 2016 but sales fell 3.3% month on month.
Ishaan Malhi, chief executive officer of online mortgage broker Trussle, pointed out that first time buyers looking to get onto the property ladder still face the gruelling prospect of having to raise a deposit of around £30,000 which is higher than the average UK salary.
‘The surest way to boost home ownership among the younger generation is to build more homes, but aspiring homeowners could be waiting a while for that supply to arrive. In the meantime, the best bet is to make the most of government schemes like Help to Buy and Starter Homes, while shared ownership could also help realise the home ownership dream for those struggling to find a way in,’ he said.
John Goodall, chief executive officer of buy to let specialist Landbay, believes that the figures indicate that supply and demand remains severely out of kilter, meaning that housing affordability remains one of the most pressing issues facing society over the medium to long term.
‘The roots of the affordability crisis can be traced back to insufficient construction over the past decade, but a number of other macroeconomic factors are now also playing a part. Wage growth is struggling to keep pace with rocketing inflation, which is hitting people’s pockets and making it harder for aspiring home owners to afford their first property, as well as discouraging existing homeowners from moving,’ he said.
‘This is pushing more and more people toward the private rental sector to house them while they save, so construction needs to focus not only on more affordable homes for first time buyers, but for the rental sector as well,’ he added.
Jeff Knight, director of marketing at Foundation Home Loans, also believes that the needs of the private rented sector should not be overlooked. ‘With political uncertainty, stagnant wage growth and a continued shortage of properties, at least enough to meet demand, it’s been hard to see any real momentum in the market. Having said that, it’s never quite enough to put too much of a brake on purchasing, and with interest rates held at record lows buyers can continue to take advantage,’ he said.
‘As ever, the rental sector is providing that stepping stone to ownership. Choice for tenants and high standards need to be maintained, so that those not yet at the stage of fully committing to a property can save confidently towards that first step onto the ladder,’ he added.
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