Property prices increase by 10.2%
9:59am Tuesday 19th August 2014 in © Press Association 2014
House prices have surged by 10.2% over the last year to reach a new all-time high of £265,000 typically, official figures show.
Property values in London have continued to increase around twice as quickly as those across the UK, with the capital seeing a 19.3% jump in prices in the 12 months to June, according to the data released by the Office for National Statistics (ONS).
The average house price in London is now just shy of half a million pounds, at £499,000, and the ONS said that "house prices are increasing strongly across most parts of the UK".
The report reveals that a typical first-time buyer faces paying 12.0% more for their starter home than they did a year ago, which the ONS said is the highest annual increase seen for this sector since April 2010.
In June, which is the most recent month for which the figures are available, the average price paid for a house by a first-time buyer was £204,000.
On a month-on-month basis, house prices in general increased across the UK by 0.5% between May and June.
London and the South East are continuing to record the strongest annual price uplifts, and the ONS said that if these regions were taken out of the figures, UK house prices would have increased at a slower pace of 6.3% in the 12 months to June and they would stand at £201,000 on average.
However, all regions have seen house price growth over the last year. The North East remains the English region with the lowest average house prices, at around £150,000. However, prices in the North East have lifted by 4.4% annually.
Wales has seen the smallest annual price growth out of all the UK nations and regions, with a 3.5% year-on-year increase taking average prices there to £167,000.
In Scotland, property values have grown by 6.0% annually, pushing the average house price there to £193,000. Northern Ireland, which saw some sharp falls in property values in the wake of the financial crisis, has seen prices lift by 4.9% over the last year, taking them to £137,000 typically.
Property values in England have risen at a faster rate than the UK average, with a 10.7% annual increase pushing the average price to £276,000.
England remains the only UK country where property prices are higher than their pre-financial crisis peak, now standing at 10% above their previous high seen in 2008.
Prices in Northern Ireland are around 47% below their previous peak, while those in Wales are sitting around 3% below their previous peak levels. Values in Scotland are the closest to touching their previous peak, currently standing at 1.6% below their previous high in 2008.
Campbell Robb, chief executive for housing charity Shelter, said: "Today's house price hike is yet another blow for people across the country desperate to put down roots and create a stable home.
"No matter how hard people work or save, millions are being priced out of a home of their own, caught in the 'rent trap' and constantly moving from one expensive property to the next."
The continued strong growth in house prices was reported as commuters learned that they face a 3.5% increase in rail fares next year after official inflation figures used to calculate the rise were published.
The new-year rises are based on the previous July's rate of Retail Price Index (RPI) inflation plus 1%.
Some other recent studies which point to how trends are likely to develop in the housing market in the coming months have suggested that the London housing market is now starting to rapidly cool off.
Experts have suggested this is probably due to the impact of consumers growing more cautious amid speculation over when interest rates are likely to rise, which will mean borrowers face higher costs, as well as stricter mortgage lending rules which came into force at the end of April.
The new Mortgage Market Review (MMR) rules force lenders to ask borrowers for more detail about their spending habits, to check that they can truly afford their home loan. They also have to apply "stress tests" to make sure that the borrower could still afford their repayments as and when interest rates increase.
The Bank of England also expects the pace of house price inflation to slow in the coming months.
Earlier this month, the Bank predicted that house price growth is forecast to halve by next spring, which could mean that prices across the UK increase at a more moderate pace of around 6% across next year.
But the Bank couched the predictions in cautious terms, saying: "There is more uncertainty about the path for the housing market in the near term than three months ago."
Housing Minister Brandon Lewis said: "This Government is committed to delivering long-term economic stability and economic growth."
He continued: "House building is now at its highest level since 2007 and continuing to grow, and 200,000 new affordable homes have been delivered across England since 2010.
"By tackling the deficit left by the last administration, we are helping keep down both interest rates and the number of repossessions."