No more bubble? UK house price growth falls to 10.2 per cent

House price hysteria has calmed slightly with prices rising by a marginally more modest 10.2 per cent in the year to June, compared with 10.4 per cent in May, official figures showed today.

 

According to the Office for National Statistics' House Price Index, London and the South East continued to drive growth, with prices rising 19.3 per and 9.7 per cent respectively. That means in June, the average house price in the capital was 35.6 per cent more than it was in January 2008. 

 

 

Stripping out growth figures for those two regions, prices across the UK rose by a more sober 6.3 per cent during the period.

 

Clearly the ONS came late to the party: almost every other index has already suggested growth is on the wane.

 

Yesterday, for example, figures by Rightmove showed prices in England and Wales rose 5.3 per cent in the year to July, down from 6.5 per cent in June. At the end of July, Nationwide’s figures showed house prices increased by just 0.1 per cent during the month, their slowest rise since April 2013.

 

But despite cooling in the market, first-time buyers were still hit hardest: the ONS figures showed they paid 12 per cent more on average in June than they did in the same month last year. Those on higher rungs of the ladder paid 9.5 per cent more. 

 

David Newnes, director of Your Move estate agent, suggested the fall was a “return to a more natural state of affairs”.