According to the Office for National Statistics (ONS), house price inflation has accelerated slightly. The year leading up to June saw house prices rise by 5.7%, compared to only 5.6% in the twelve months to May 2015.
The 5.7% house price inflation figure reflects average price growth across the UK, but the uptick reflects the fact that most regions saw prices increase over this period, the ONS said. All areas of the UK except Scotland saw their prices rise.
This pick-up in house price growth is very small, but has nonetheless been heralded as a notable one because it goes against trends. The rate at which UK house prices rise has been slowing since last September, when it reached a peak of 12%. Nonetheless, it remains to be seen whether this slight gathering of pace is any more than a slight blip in the middle of a general downward trend, and data from the Land Registry does indeed suggest that the rate of house price growth continues to fall.
Of course, a slowing rate of growth should not be confused with a fall in prices. Property values are, at present at least, still rising throughout most of the UK and in June they reached a record level. According to the ONS, June saw the average cost of a UK residential property hit a new high of approximately £277,000. The fact that prices continue to increase, the ONS said, is down to the UK’s current status as a market with very strong demand for residential properties yet a comparatively weak supply. New builds seem to be doing fairly little to strengthen supply. A separate but recent report from the ONS shows that the past year has seen only a 4.6% rise in residential construction activity throughout the UK, and this is the lowest annual rate of growth recorded since March 2013.
However, while prices continue to rise throughout the majority of the UK, the extent of this is very varied. In Scotland, the only UK region to see a fall in prices, the average property value fell by 0.6%. At the opposite end of the spectrum, the biggest increase was in Northern Ireland where prices grew by 9%. England showed a more modest yet nonetheless strong growth rate of 6.1% in the year to June, while Wales saw an increase of only 0.8%.
Separate reports from the Land Registry also put something of a damper on the ONS’ announced uptake in price growth. The Land Registry recorded a lower rate of price growth, 5.4%, in the year to June, and also reports that this fell to just 4.6% in the year to July. The ONS has not yet released any data for the year to July.
