UK average house prices increased by 8.7 per cent in the year to June - up from 8.5 per cent in the year to May - continuing strong growth seen since the end of 2013.
The Office for National Statistics stated the average UK house price was £214,000 in June, £17,000 higher than the same month last year and £2,100 higher than in May.
The main contribution to the increase in UK house prices came from England, where house prices rose by 9.3 per cent over the year to June, with the average price in England now £229,000.
Wales saw house prices increase by 4.9 per cent over the latest 12 months to stand at £145,000. In Scotland, the average price increased by 4.6 per cent over the year to stand at £143,000 and the average price in Northern Ireland is currently £123,000.
On a regional basis, London continued to have the highest average house price at £472,000, followed by the south east and the east of England, which stood at £309,000 and £270,000 respectively.
The east of England also replaced London as the region which showed the highest annual growth, with prices increasing by 14.3 per cent in the year to June. Growth in London remained high at 12.6 per cent, followed by the south east with a 12.3 per cent annual growth.
The lowest annual growth was in the north east, where prices increased by 1.5 per cent over the year, while the region also had the lowest average price, at £124,000.
To prove the point, in June the most expensive borough to live in was Kensington and Chelsea, where the cost of an average house was £1.2m, while the cheapest area to purchase a property was Burnley, where an average house cost £75,000.
The local authority showing the largest annual growth in the year to June was Western Isles of Scotland, where prices increased by 28.1 per cent to stand at £121,000. The lowest annual growth was recorded on the other side of the country in the City of Aberdeen, where prices fell by 6.8 per cent to stand at £178,000.
Andrew McPhillips, chief economist at Yorkshire Building Society, said the increased house price growth in June was the result of the new stamp duty rate for landlords earlier in the year.
“This caused landlords to flood the market to beat the new rate, which resulted in a drought of available properties after the new tax came into force in April, consequently exacerbating the supply shortage,” he explained.
“Although we are likely to see fluctuations in demand in the short-term due to uncertainty following the result of the EU referendum, the underlying lack of supply will remain as a constraint on market activity and is likely to push up house prices in the long-term.”
peter.walker@ft.com
