3 Sep

House prices continue to rise

House prices continue to rise

House prices across England and Wales rose by 1.7 per cent during July, according to the latest figures.

Data from the Land Registry shows that the average house price is now £175,653 - 7.2 per cent higher than July 2013.

This means that property prices are edging closer to the peak average of £181,442 recorded in November 2007.

London reported the largest increase in average property prices over the past 12 months, with a rise of 19.3 per cent. The capital also showed the highest monthly rise of the regions, with 3.3 per cent growth.

The lowest growth of the year was in the North East with two per cent, while Yorkshire and the Humber reported a fall in 0.6 per cent over the last 12 months.

David Newnes, director of Reeds Rains and Your Move estate agents, explained that house prices have levelled as more properties have come on to the market. In addition, tighter leading regulations have changed the state of the market.

"There is still a lot of ground to make up in the volume of sales happening. House prices have stabilised in many regions and have still not matched the heights reached before the crisis," said Mr Newnes.

"London may routinely grab the headlines, but Help to Buy and higher available loan to value lending are indispensable in parts of the country where recovery remains subdued," he added.

However, there could be further uncertainty in the housing market following the latest minutes from the Bank of England's Monetary Policy Committee (MPC).

Although the panel voted not to change the base rate of 0.5 per cent, the 7-2 margin represented the first time since August 2011 any members of the MPC have supported an increase in the interest rate.

The two members supported a 0.25 per cent rise and it could signal an increase in the rate sooner rather than later.

"These members noted that the continuing rapid fall in unemployment alongside survey evidence of tightening in the labour market created a prospect that wage growth would pick up," said the minutes of the MPC’s 6th-7th August meeting.

"They noted that it was possible that wages were lagging developments in the labour market to some extent... Since monetary policy, too, could be expected to operate only with a lag, it was desirable to anticipate labour market pressures by raising [the] Bank Rate in advance of them."

Any change in the rate would be the first since March 2009 and this is creating a level of uncertainty across the UK.

The MPC had previously said it would raise the base rate once the country's total unemployment level dropped below seven per cent. However, this figure was reached quicker than expected as the economy started to recover and the central bank was forced to reconsider its position on raising rates.ADNFCR-1222-ID-801746301-ADNFCR

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