Average UK house price rises £32k in past year

THE average UK house price has jumped by £32,000 in a year, adding to concerns about affordability as households grapple with the cost-of-living crisis.

Property values increased by 12.8% annually in May, accelerating from an 11.9% increase in April. This pushed the typical house price to £283,000 in May, which was £32,000 higher than a year earlier, the Office for National Statistics (ONS) said.

Property values in England, Wales and Scotland all hit new record levels in May.

Average house prices increased over the year to £302,000 in England (up 13.1%), to £212,000 in Wales (14.4%), to £188,000 in Scotland (11.2%) and to £165,000 in Northern Ireland (10.4%).

Within England, the South West was the region with the highest annual house price growth, with average prices increasing by 16.9% in the year to May. London had the lowest annual house price growth at 8.2%. The capital’s properties remain the most expensive of any region in the UK, at an average of £526,000 in May.

The ONS also released rental figures, showing that private rents paid by tenants rose by 3.0% in the 12 months to June, up from 2.8% in the year to May. Private rental prices grew by 2.9% in England, 1.9% in Wales and 3.5% in Scotland in the 12 months to June.

The East Midlands recorded the highest annual growth in private rental prices (4.3%), while London had the lowest (1.7%).

The house and rental price figures were released as Britain’s rate of inflation surged to a fresh 40-year high, as rocketing fuel and food prices drove it closer towards double figures. Consumer Prices Index (CPI) inflation rose to 9.4% in June, up from 9.1% in May and remaining at the highest level since February 1982.

Karen Noye, a mortgage expert at Quilter, said: “With the Bank of England expecting inflation to peak at around 11% later this year, a 50 basis points rate hike could well be on the cards at the (Bank of England’s) next monetary policy meeting.

“If this is the case, people’s spending power will be reduced and the already dwindling number of cheap mortgage rates will quickly disappear. With wages failing to keep up, the high costs of moving could put off prospective buyers and first-time buyers will see their hopes of getting a foot on the property ladder pushed further out of reach.”