UK house prices hit record high

UK house prices hit record high

Average house prices hit a new record high of £288,000 across the UK in November after leaping by 7.7% over the previous year, according to new research.

Property values in England also reached a new all-time peak in November, increasing by 8.3% annually to reach £302,000 on average, according to the Office for National Statistics (ONS).

Several regions within England saw house prices lift to new records, including London, the South East, the East and the East and West Midlands.

In London, the average home is now worth £537,000. The North East continues to be the English region with the lowest average house price, at £157,000.

The ONS report said that the 7.7% annual rate of price growth seen across the UK was the fastest annual increase seen since March 2015. It said that property values were continuing to "grow strongly."

The report said: "Upward price pressures may be a result of a shortage of supply and strengthening demand in the housing market."

The figures also show that the average first-time buyer faces paying 7.4% more for a property than a year ago.

The typical price paid for a home by someone taking their first step on the property ladder in November was £221,000.

Property values in Scotland, Wales and Northern Ireland remain below their previous records.

In Scotland, the average price of a home has increased by 0.4% over the last year to reach £195,000. In Wales, house prices have increased by 1.3% annually to stand at around £173,000.

Northern Ireland has yet to see house prices surpass their 2007 peak. Property values there have increased by 4.6% over the last year to reach £158,000 on average.

Across the UK, average property values edged up by 0.8% month-on-month in November.

In the recent Autumn Statement, Chancellor George Osborne announced a three percentage point stamp duty hike for buy-to-let investors, which is set to come into force from April.

Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said: "The heat is set to rise in the buy-to-let and second home market in the short-term, as buyers rush to complete before the changes to stamp duty kick in in April.

"In the long-term, the dearth of properties available combined with rampant demand means house price growth isn't likely to slow any time soon. This creates clear affordability concerns for first-time buyers."

Howard Archer, chief UK and European economist for IHS Global Insight, said the ONS figures "reinforce our belief that house prices will see solid increases over the coming months."

Archer, who expects UK house prices to increase by around 6% across 2016, said: "It remains to be seen how the Chancellor's measures in the Autumn Statement affect the housing market.

"In the near term, it is very possible that the decision to impose a 3% surcharge on stamp duty on purchases of buy-to-let properties and second homes from April 2016 will lead to an increase in housing demand and exert upward pressure on prices as prospective buyers look to beat the increase.

"Further out, the move could modestly dilute housing market activity and upward pressure on prices."