Annual house prices increased by 9.6 per cent in the 12 months to March 2015, new data show, up from 7.4 per cent in February 2015, with Scotland seeing its highest annual increase in eight years.
According to the Office for National Statistics’s March 2015 house price index, Scotland led house price inflation at 14.6 per cent, followed by England at 9.4 per cent, 7.5 per cent in Northern Ireland and 5.7 per cent in Wales. This represents the highest annual increase in Scotland since July 2007.
Annual house price increases in England were driven by annual increases in the east (11.4 per cent), London (11.2 per cent) and the south east (11.2 per cent).
In the 12 months to March 2015, excluding London and the South East, UK house prices increased by 8.1 per cent.
Furthermore, compared with March 2014, priced paid by first-time buyers were on average 7.8 per cent higher in March 2015. The ONS said that for existing owners, prices increased by 10.3 per cent for the same period.
Stephen Smith, director for Legal and General Mortgage Club and Housing, said: “Many homeowners may welcome an increase in their property value, however this is not necessarily a good thing. Steep rises stop many potential buyers from being able to afford their own home.
“Ideally, house prices would grow at or around the same level as inflation so that prices don’t rise faster than people can save a deposit. The key to achieving this lies in building more houses so that supply can keep up with demand.”
He added that the new government needs to address the insufficient level of housebuilding by building 250,000 extra houses per year.
“Until we reach this figure, house prices will continue to climb which will make homeownership an unaffordable dream for many.”
Tom Harrington, managing director of online estate agents Housetree.co.uk, added: “The ONS data is pretty historic as the housing landscape has changed dramatically since March.
“Now that the general election is out of the way, and all the uncertainty surrounding it which saw buyers and sellers alike sit on their hands, the handbrake has been released on activity and confidence.
“What the ONS does show is that despite uncertainty and hesitation among buyers, certain regions in England continued to see prices increase to record levels, particularly the commuter areas into London.”