ONS report record average house price now £247,000

ONS report record average house price now £247,000

15:28 PM, 16th October 2013, About 11 years ago 3

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The Office of National Statistics (ONS) have reported the average house price in Britain is now £247,000. This figure reported for August 2013 is 0.3% higher than the previous record in 2008.

Year on year house price inflation increased from 3.3% in July to 3.8% in August this year

However the Bank of England are warning that the Governments Help to Buy scheme could cause an artificial distortion of the market pushing up prices.

Martin Weale, a member of the monetary policy committee (MPC), confirmed average house price rises were “appreciably more rapid” than the Bank of England had expected. Weale said “if the mortgage-guarantee element of Help to Buy is not priced satisfactorily, it will add to demand while supply is weak leading to increased pressure on prices.”

“Rising house prices may make people feel cheerful and more prosperous, thereby supporting household spending, but rising house prices impose a burden on those who do not yet own houses but aspire to in the future. Like government borrowing, rising house prices can crowd out productive investment.”

Sir Jon Cunliffe, deputy governor of the Bank of England said he would keep a “very firm eye” on lenders, but “it is too early to say we are entering into a bubble.”

The Bank of England are however, known to be critical of short term artificial manipulation of the mortgage/housing market in favor of more sustainable long term growth of available lending provided by the finance markets themselves.

ONS key Findings:

  • In the 12 months to August 2013 UK house prices increased by 3.8%, up from a 3.3% increase in the 12 months to July 2013.
  • House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average.
  • The year-on-year increase reflected growth of 4.1% in England, 1.1% in Northern Ireland and 1.0% in Wales, offset by a fall of 0.7% in Scotland.
  • In August 2013, the UK HPI surpassed its previous peak in January 2008 (185.5) by 0.3%.
  • Annual house price increases in England were driven by London (8.7%), the East Midlands (3.8%) and the West Midlands (3.5%).
  • Excluding London and the South East, UK house prices increased by 2.1% in the 12 months to August 2013.
  • On a seasonally adjusted basis, UK house prices increased by 0.5% between July and August 2013.
  • In August 2013, prices paid by first-time buyers were 4.9% higher on average than in August 2012. For owner-occupiers (existing owners), prices increased by 3.3% for the same period.

However Economist are reporting overall activity to be well below levels recorded before the financial crisis and it is only London prices that are causing a concern as to whether they are sustainable or not.

If you take the weighting effect of high London prices most house prices around the country are still 10-15% below their pre-crunch peak and we are a long way off seeing a market wide housing bubble.average house price

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Mark Alexander - Founder of Property118

15:42 PM, 16th October 2013, About 11 years ago

As always, the figures are skewed by London house prices where there is clearly a bubble. Perhaps the regulators should restrict the availability of "Help to Buy" to areas which are yet to recover to pre-credit crunch prices or an index which is based on average prices in post codes plus a bit for inflation? That's what I would do but Westminster wouldn't like that would they as property prices in that area are already at record high levels and as always greed of those in power demands more, more, more.

Neil Patterson

15:53 PM, 16th October 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "16/10/2013 - 15:42":

Those in Power all have property in London probably paid for by expenses.

16:21 PM, 16th October 2013, About 11 years ago

while this is good news for us all, and for the economy in general I wonder why the various people I know who have their houses up for sale are not receiving even a viewing, never mind an offer, all this despite reducing the Price drastically.

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