The latest data and analysis from ONS has revealed that across the UK during August average house prices rose by 5% - a 0.5% increase from July.
According to ONS, this is above the average annual growth rate, which the organisation suggests has "remained broadly under 5%" during 2017 so far.
The main contribution to the increase in UK house prices came from England, where house prices increased by 5.3% over the year to August 2017, with the average price in England now £244,000.
Wales saw house prices increase by 3.4% over the last 12 months to stand at £150,000. In Scotland, the average price increased by 3.9% over the year to stand at £146,000. The average price in Northern Ireland currently stands at £129,000, an increase of 4.4% over the year to Q2 2017.
The North West showed the highest annual growth, with prices increasing by 6.5% in the year to August 2017. This was followed by the East of England, East Midlands and South West, where prices increased by 6.4% in each. The lowest annual growth was in London, where prices increased by 2.6% over the year, followed by the North East at 3.7%
Doug Crawford, CEO of My Home Move, comments: “It would seem that the UK property market has yet again displayed signs of its robust nature as prices continued to rise throughout August, with the average home now costing £225,956. While this carries some good news for sellers, there is still a concern that unless enough of the right stock is made available to buy, either through a coherent building programme or further government backed incentives the market will begin to slow. This is especially true for those looking to downsize into homes that meet their wants and needs.
Today’s news that inflation has risen to 3%, means that home movers across the board are likely to be in for a bumpy ride, unless wages are set to increase too. With the Autumn Budget on the horizon, we watch eagerly to see if the Chancellor will go further than the promises made by Theresa May during her Party Conference, and provide the Stamp Duty holidays or adjustments which will help those looking to move access the homes of their dreams.”
Graham Davidson, managing director of Sequre Property Investment, said: “The report continues to show a promising outlook for the property market. The monthly increase of 0.5% is fairly typical for the time of year but add this to the 5% annual change and we have some very interesting figures for property owners. This 5% annual rise would represent a huge 20% increase on the cash an investor would have invested into the property based on purchasing with just a 25% deposit. The North West saw the biggest regional growth at 6.5%, showcasing the fact they are continuing to outperform their southern counterparts where prices are cooling and demand continues to diminish.”
Jonathan Samuels, CEO of the property lender, Octane Capital, had this to say: "How the mighty have fallen. London has gone from front of the field to back of the pack in little over a year. Even by its own standards, prices in the capital had become obscene and so the current cool-down is a positive longer term.
Prices in the capital will only fall so far because of the strength of demand and lack of supply. In a now familiar narrative, the lack of supply, low borrowing costs and high employment are propping up prices around the UK despite the level of economic and political uncertainty.
With inflation now at 3% and the first rate rise for a decade potentially not far off, consumers are likely to be even more cautious in the months ahead. When households feel the squeeze, and many will be given the lack of wage growth, thoughts of moving home are generally put on the back burner.
2018 is likely to be a mirror image of 2017, with a hesitant market kept alive by the sheer lack of supply."
Russell Quirk, founder and CEO of eMoov.co.uk, commented: "A rather modest rate of growth continues for the UK market but positive growth none the less, which is good news for homeowners given the turbulent market conditions.
This slowdown in price growth may seem as unusual as the sun that shone over the UK yesterday but there are positive signs peeping through the clouds. While a slowing London market may be putting a dampner on the overall forecast, England continues to lead the way where prices are concerned with many areas seeing strong annual growth.
It's testament to the diversity and resilience of the UK market that this growth is spread across the North West, South West, East and Midlands.
With a sustained level of buyer interest, albeit more cautious than usual, the market should weather any potential storm on the horizon, with the dark clouds of recent market uncertainty already starting to lift."
Ged McPartlin, Director of Ascend Properties, comments: “This recent report is certainly indicative of what we’re seeing on the high street. With house prices rising steadily this year at 5% annually and 0.5% in August, buyers are keen to jump on the ladder before they escalate any further.
Vendors are keen to sell quickly to whoever can move the fastest, and this coupled with a shortage of stock, particularly in northern areas like Manchester and Liverpool where house price growth is outpacing the national average, is creating a frenzy of activity. That being said, house prices are nowhere near as over-inflated as they are in the south and continue to be affordable. The main issue is the lack of stock and until this is addressed, we’re likely to see prices continue following an upwards curve due to the supply and demand imbalance.”
Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said: “House price growth is good news for home owners, but won’t be welcomed by those looking to get on the ladder. We've already begun to see many lenders increase their rates this month, and there could be further rate rises on the horizon from the Bank of England. This will make securing a first mortgage that bit harder, though we should remember that there are still extremely attractive mortgage deals on the market.
If the Bank of England does decide to raise the base rate next month, it will have an immediate impact on those on a variable rate mortgage, who will see their monthly mortgage payments creep up. With more rate rises potentially on the horizon, those nearing or beyond the end of their initial mortgage term should already be thinking about switching to a more suitable deal.”
John Goodall, CEO and co-founder of buy to let specialist Landbay said: “House prices rose across the UK in August as the market shrugged off any signs of a prolonged summer slowdown. Although record low mortgage rates will be helping those who have already stumped up a deposit, escalating house prices will come as yet another blow to aspiring homeowners looking to get their foot on the housing ladder.
It is essential that the Government doesn’t lose focus on addressing the housing crisis and makes good on its promise to build the thousands of new, affordable homes that people desperately need. Fast approaching, next month’s Autumn Budget will be a chance for the Chancellor to reassure the industry on these plans and, I hope, address some further urgent matters. Investment and planning in the areas where rental and house price growth is reaching particularly unsustainable levels, like the East of England, will be key.”
Jeff Knight, Director of Marketing for Foundation Home Loans commented: “House prices are just one part of the housing market puzzle, and another rise in prices is not reflective of a buoyant market. There appears to be areas of the country where there is more activity than others, most likely driven by greater levels of affordability. A rise in interest rates will place great strain on this affordability – despite the fact they will still be at an unprecedented low.
We need more housing - and affordable housing – but delivering that has clearly been a challenge for a long time and we are seeing the consequences today."
Paul Smith, CEO of haart estate agents, comments: “House price rises seem unstoppable – home buyers are having to pay a £11,000 more for their homes than the same time last year. A likely interest rate rise in the coming months could mean a further surge, as buyers fight over limited stock in the run-up to Christmas, and look to lock down a cheap fixed rate mortgage before the Bank of England steps in.
However as prices rise so does unaffordability – the Government must finally act on a stamp duty cut for first-time buyers. Stamp duty is holding back a whole generation of young people already struggling to save for a deposit, and it is time to bring this injustice to end. For hard working individuals who have to borrow for the basic cost of living, saving for both stamp duty and a deposit to own their own home is a far-flung reality. Especially as our branch data shows first-time buyer deposits are up 6% on the month, outpacing inflation.
The Autumn Budget is surely the last chance for Theresa May and Phillip Hammond to provide meaningful help to young people and families struggling to get onto the ladder. If they fail to think big, it looks likely this will be their last.”