House prices continue growth - but at a slower rate

House prices continue growth - but at a slower rate

The rate of growth in house prices has slowed for the first time in nearly a year, according to inflation figures from the Office for National Statistics.

Average house prices in the UK grew by 8.3 per cent in July meaning the average home now costs £217,000.

This is £17,000 higher than in July 2015 and £1,000 higher than June.

Article continues after advert

July’s figure compares with 9.7 per cent growth in June and is the first time house prices have stopped growing by an ever-larger proportion month-on-month since August 2015.

The figures released today are the first to show a full month’s house price statistics since Britain’s vote to leave the European Union in June.

Analysis by Countrywide suggested economic risks and uncertainty would see house prices falling by 1 per cent in 2017.

New-build houses are growing at a faster rate than existing homes, which have all but stopped increasing in price on a month-on-month basis.

The average new-build property cost £254,604 in July, growing by 4.6 per cent compared with June.

Meanwhile the average existing home cost £205,914, growing by only 0.3 per cent on the month before.

The ONS bulletin said: “On a regional basis, London continues to be the region with the highest average house price at £485,000, followed by the south east and the east of England, which stand at £313,000 and £274,000 respectively.

“The lowest average price continues to be in the north east at £130,000.”

In July 2016, the most expensive borough to live in was Kensington and Chelsea, where the cost of an average house was £1.3m while the cheapest area to purchase a property was Burnley, where an average house cost £75,000.

The council area which saw the greatest increase in house prices during July was Na h-Eileanan Siar - the Outer Hebrides - where a home cost £114,625 in July, 31.5 per cent higher than in June.

Analysis by AmTrust and Moneyfacts earlier this week suggested that first-time buyers would be affected by the referendum most, with the number of high loan to value mortgage products falling for two consecutive months since June.

Adviser view

Mike Richards, director of London-based Mortgage Concepts Associates, said: “We are still relatively busy. There has been a drop-off in buy-to-let but we are getting a few more enquiries about normal purchases.

“Despite the predictions of doom and gloom after the referendum things have kepts on going relatively well.”