House prices fall marginally in February: ONS

House prices fall marginally in February: ONS

UK house prices rose by 7.6 per cent in the year to February in a slight slowing on last month, according to the latest Office for National Statistics house price index, amid suggestions buyers are being held back by limited supply.

House price annual inflation was 8.2 per cent in England, 2.8 per cent in Wales, 2.4 per cent in Northern Ireland and -0.8 per cent in Scotland. The average house price in was £284,000 across the UK.

Annual house price increases in England were driven by an annual increase in the south east (11.4 per cent), the east (10.3 per cent) and London (9.7 per cent). Excluding London and the south east, UK house prices increased by 5 per cent in the 12 months to February.

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On a seasonally adjusted basis, average house prices increased by 0.4 per cent between January and February, with prices paid by first-time buyers in February coming in 8 per cent higher on average than in the same month last year.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said cheap mortgage rates, a base rate offering no signs of rising anytime soon and falling unemployment, are giving buyers more confidence to take the plunge.

But limited supply is holding them back.

“Limited supply is likely to be the biggest issue they face in the short term but it may be house price growth which is the bigger issue longer term as it continues to outpace real earnings growth by some margin.”

Meanwhile, E.Surv’s director Richard Sexton suggested there’s a regional revolution underway.

“House prices in the east and south east have been hanging on the capital’s coat-tails for a long time, but not anymore. People struggling to purchase property in the capital are hunting elsewhere and the south east is the obvious choice – creating a surge in demand.

“Across the UK however, the usual suspects are holding back homeownership dreams. A supply shortage is leading to price hikes – which many buyers simply can’t meet.

“This shouldn’t be the case,” he added. “Savings have seen a boost from low inflation and rising wages. But unfortunately, housing market prices are generally still moving faster.”