House prices were predicted to fall following the end of the stamp duty holiday, but still increased over the past year by 11.8 per cent to hit a new average record high.
Average UK homes rose in value by £28,000 to £270,000 in the 12 months to the end of September, says a report from the Office for National Statistics (ONS).
The snapshot was published on the same day the stamp duty holiday in England ended.
The ONS says average house prices are highest in England where they went up 11.5 per cent to £288,000 in the year – the highest ever average figure.
The most growth was in Wales, where prices added 15.4 per cent to hit an average value of £196,000. Scotland saw a 12.3 per cent rise to £180,000.
London was at the bottom of the pile for the tenth month in a row, with an annual increase of 2.3 per cent.
However, the ONS explained this latest house price index is based on fewer transactions than normal, as the way the number crunchers process data has changed. This may lead to revised data over the coming months.
How house prices have changed since 2005
Britain’s favourite online property platform Rightmove forecasts a slight drop in house prices in the lead up to Christmas and the New Year.
The firm says asking prices are already down 0.6 per cent as homeowners who want to move before the holidays shave their expectations.
Rightmove says the measure knocks an average of £2,000 off the price of a home and is the largest monthly drop in value since January.
Tim Bannister, Rightmove’s Director of Property Data, said:
“Despite the soaring property market and shortage of homes for sale, new sellers have given buyers an early Christmas present by dropping their average asking prices.
“Sellers who come to market this close to the distractions of Christmas often have a pressing reason to sell, so naturally price more attractively to grab the attention of prospective buyers.
“We expect this downward price trend to be relatively short-lived, though sellers who are in a hurry will continue to need to attract buyers for most of December as well. As soon as Christmas Day is out of the way, there’s a boom in people searching for property.”
Estate agents rue number of homes for sale
Buyers have less choice as the number of homes with an agreed sale dips and may drag prices down next year, warns estate agent trade body the Royal Institute of Chartered Surveyors (RICS).
Estate agents note demand is slightly up, but sales are sluggish, while new instructions have fallen for the seventh month running.
The RICS market survey said: “Still weighing on the market however, the lack of available supply continues to present would-be buyers with limited choice, and remains a key factor underpinning strong house price growth.”
House prices by region
House prices in London are still higher than in the rest of the country, even though values are growing the slowest in the capital.
The North West has the fastest rising prices – up 16.8 per cent in a year.
In London, the prices still rose but by only 2.8 per cent in the year. Average house prices in the capital are £507,000.
The lowest home values are in the North East, where they average £153,000.
House prices by region
House price history for your neighbourhood
Use this interactive map to assess how your property investments have performed over time. Input the town name, and the map does the rest.
Source: ONS and Land Registry
House Price Digest FAQ
The figures for average house prices and movements in property values can be confusing if you don’t know how to read the data.
Here are some of the most asked questions about house price indices.
Why are the average property prices different in each report?
The reports use different data to draw their conclusions and take the data from different periods.
The Nationwide and Halifax base their indices on customer data, which are much smaller samples than the national data analysed by the ONS.
Acadata’s methodology includes analysis that no other index uses.
Each organisation collects data over different periods, making a direct comparison difficult.
What is the average house price?
There’s no such thing as an average home. The figure is simply math calculated from the total value of all transactions in the sample divided by the number of homes changing hands.
Which house price index is the best?
All have flaws because of the restricted data, but the one with the broadest sample comes from the ONS. Unfortunately, the ONS data is usually the last to market and out of date by two to three months on publication.
We have more investing in property information for England and Wales.
See more articles from the statistics category here.