ONS: UK house prices eclipse 250k mark
House price growth in London fluctuated at more than double the UK average, at 12.3%.
Excluding the South East and London areas, prices grew by a more modest 3.1% over the year.
Vantage Finance’s director Lucy Hodge, said: “There has been some suggestion that this rise in house prices is unsustainable, which is true, but I believe that soon the market will readjust itself naturally. I don’t believe that we will see the so called ‘bubble’ burst as such.
“For property investors, it’s a great time to move onto new projects and the liquidity in the market indicated by the price rise is also a welcome sight for brokers.”
Rory Penn, partner of London estate agency VanHan, agreed that the idea of a house price bubble is overplayed.
He said: “Regional house prices will play catch up on central London for a few years as mortgage financed buyers re-enter the market.”
Properties bought by first-time buyers increased by 7.4% over the year to December 2013, compared to 4.7% for homemovers.
The average price paid for a house by a first-time buyer was £189,000.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “First-time buyers and existing owners are competing on an uneven playing field.
“The uplift in prices can make or break homeowning ambitions, especially for those aspiring buyers who are juggling rental payments with saving for a deposit. Lenders are coming to the rescue with an increasingly flexible range of mortgages, and these figures show just how important it is that government and lenders keep extending a helping hand to lift people over that initial hurdle.”
Penn agreed, adding: “First-time buyers are paying significantly more than they were a year ago and if this trend continues, lack of affordability could start to become an issue.
“For now, however, it’s the best opportunity for first-time buyers to get on the housing ladder for some years with interest rates at historic lows.”
House prices grew by 5.7% in England, 4.8% in Wales, 0.5% in Scotland and 4.8% in Northern Ireland.
On a seasonally adjusted basis, average house prices increased by 0.9% between November and December 2013.