House prices continue to increase strongly across the majority of the UK, with prices in London again showing the highest growth at 13.3%, followed by the
South East (11.5%) and the East (11.4%). The lowest growth in December 2014 was in the North West, where prices increased by 4.0% over the year. Excluding London and the South East, UK house prices increased by 7.4% over the year to December 2014.
House price annual inflation was 10.2% in England, 4.0% in Wales, 5.5% in Scotland and 4.9% in Northern Ireland.
On a seasonally adjusted basis, average house prices increased by 0.7% between November and December 2014.
The average price for properties bought by first-time buyers increased by 9.5% over the year to
December 2014, down from an increase of 11.0% in November 2014. In December 2014 the average price paid for a house by a first-time buyer was £208,000.
The average price for properties bought by former owner-occupiers (existing owners) increased by 9.8% in the year to December 2014, up from an increase of 9.4% in November 2014. In December 2014, the average price paid for a house by a former owner-occupier was £314,000.
Stephen Smith, Director Mortgage Club and Housing at Legal & General, said:
"Today’s data shows that house prices are once again rising. While homeowners may welcome an increase in their property value, this is not necessarily positive. For the market to grow in a sustainable and healthy way, it is important that house prices do not rise too quickly. Increases above the rate of inflation stop those on lower incomes and first time buyers from being able to afford a house.
"To ease the pressure on house prices, we need to build more homes. Demand still outstrips supply in the UK, particularly in areas such as London and the South East. The general election has brought this issue to the top of the political agenda and it will be essential that whoever wins the election makes good on their promises and address the issue."
Charlie Wells, managing director of buying agency Prime Purchase, added:
"Despite the slowdown in the housing market towards the end of last year, prices are still rising, driven mainly by London and the south east. As we move into this year, things have got off to an encouraging start with the core market of around £1m to £1.5m very active.
"Those first-time buyers who are getting help from their parents are in a strong position in the market up to £1m and there are also plenty of buy-to-let investors competing in that space.
"Changes in stamp duty in December have also resulted in confidence growing from the bottom up, with the vast majority of the market benefiting from a reduction in the levy. Vendors who price their homes correctly and present them well are still selling quickly.
"There is more caution among buyers and sellers further up the chain; there are plenty of viewings but these are not necessarily converting into sales. The general election is giving some homeowners an excuse not to put their property on the market until certainty returns. The reality is that if you have something special to sell then it will always sell, whether a general election is looming or not.
"With interest rates unlikely to rise this year, those reliant on a mortgage will find it is a good time to buy. This will particularly benefit first-time buyers and stretched young families trying to move up the housing ladder."
