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House prices up 11.7pc

Robyn Hall

September 16, 2014

The figures were published as the ONS also revealed that inflation, as measured by the Consumer Prices Index, had slowed slightly to 1.5% in August from 1.6% the month before.

The ONS said that house prices in July rose by at least three times more than the inflation rate in August in every area of the UK.

Charles Haresnape, managing director, mortgages and commercial lending at Aldermore, said: “The housing market picked up momentum again in July as we saw record numbers of first time buyers entering the fray assisted by the help-to-buy scheme and increasingly competitive mortgage deals.

“The pace of growth has picked up all around the country which is fine if you’re an existing owner but really piles on the pressure for those still wanting to buy a property. I sense that there is a growing sense of urgency among borrowers that they need to get on the housing ladder now or miss the boat altogether.

“What we really need is a meaningful number of new properties added to the supply side to satisfy extra demand without house prices being squeezed up to what I believe could be unsustainable levels. It’s hard to see that London properties can continue to grow by over 19% a year for much longer, and even if they do, it means that only the very richest residents will be able to afford to buy a property. We are in danger of becoming a nation of landlords and tenants within just a couple of generations.”

And Jeremy Duncombe, director, Legal & General Mortgage Club, added: “Although these figures show that there has been a slight monthly increase in house prices, it is the longer term trends that we should really be focussing on.

“House prices have increased by 11.7% in the year to July – a more reliable indicator of demand than the monthly fluctuations we have seen. However, this continuing strong uptick in prices should not necessarily be celebrated.

“In order to create a healthy and sustainable housing market, house price increases need to roughly match the rate of inflation. Currently, property prices are outstripping inflation significantly. The lack of housing supply is undeniably one of the key factors making it harder to buy a house, as increasing demand pushes up prices.

“Increasing the availability of appropriate housing stock is therefore a core area where industry and government efforts need to be focussed as we go into the last quarter of the year.”


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