House prices edge up, driven by London and the south east

Kasmira Jefford
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HOUSE prices increased 1.5 per cent in the year to October with more than half of the growth driven by London and the south east, official figures revealed yesterday.

The latest monthly survey by the Office for National Statistics (ONS) shows that prices rose by 0.2 per cent in October compared with the previous month to a UK average of £231,000.

The year-on-year increase reflected a 1.8 per cent rise in England and 2.8 per cent in Wales, which were offset by a decline of 2.2 per cent in Scotland and 11.7 per cent in Northern Ireland.

In England, prices were fuelled by a 3.4 per cent rise in London and a 3.1 per cent increase in Yorkshire.

Excluding London and the south east, UK house prices were up by just 0.8 per cent in the year.

The ONS data is in line with recent figures from LSL Property Services but contrasts with more bearish data from Halifax and Nationwide, which pointed to a fall in prices in the year.

“House prices may not be rocketing upwards by anything like the speed seen before the crunch, but they have inched up on the back of a strengthened labour market and signs of an improving – albeit sluggish – mortgage market,” David Newnes, director of LSL Property Services, said. “However, it’s still wealthier homebuyers with equity that are best placed to take advantage of the current housing market, and this is feeding though into greater regional disparities.”

The Home Builders Federation separately reported yesterday that planning permissions in England were up 36 per cent in the third quarter from the previous quarter, and were 17 per cent higher than last year at 33,881 approvals.

The numbers however are still half the 60,000 needed each quarter to meet demand, the HBF warned.