House price rises slow to 10.4% in October

16th December 2014


House prices rose by 10.4% in the year to October to £271,000, although the rate of increase slowed down 12.1% in the year to September 2014, the latest official figures show.

Month-on-month, the increase was just 0.1%, according to the Office  for National Statistics.

In London, prices increased by 17.2% to £504,000 in October. The rate of growth in the capital has cooled considerably since August when it was 19.6%.

Annual house price growth was 10.8% in England, 5.7% in Wales, 4.9% in Scotland and 4.9% in Northern Ireland.

Prices paid by first-time buyers were 12% higher on average than in October 2013. For existing owners moving up the ladder, prices increased by 9.7% for the same period.

Alex Gosling, managing director of online estate agents, said: “The market is likely to cool further in the run up to Christmas as many house hunters put their search on hold. But the impact of the Chancellor’s surprise stamp duty announcement at the start of the month should ensure there is no substantial loss of momentum.

“The most expensive homes have become liable for higher tax, while many in the more modest price brackets have seen their stamp duty cut. The likely result is an uptick in demand – and prices – in all but the prime markets.

Gosling added: “Demand is well spread across the regions now, with buyers putting in more sensible offers. As always, the best properties are still achieving decent prices while overpriced properties struggle to sell.

“The market is pausing for breath, and even though mortgage lending criteria are as tight as ever, the Chancellor’s stamp duty surprise could get prices off to a strong start in 2015.”

But Shelter’s chief executive, Campbell Robb, pointed to the continued affordability problems facing first-time buyers.

He said:“This is yet another blow to the millions of young people and families desperate to build a stable future in a home of their own. With the average house in England now costing more than ten times the average wage, millions of people are finding themselves stuck in the ‘rent trap’ with little hope of ever saving for a deposit.

He was less enthusiastic about the Chancellor’s stamp duty reforms.

He added: “The recent announcement on stamp duty has been presented as a big win for aspiring homeowners, yet the government’s own figures show that it will be of little to no benefit to buyers.

“The only thing that will bring home ownership back within reach for generation rent is for politicians to commit to build enough genuinely affordable homes.”

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