House price annual inflation was 12.0% in England, 7.4% in Wales, 7.6% in Scotland and 4.5% in Northern Ireland.
Prices are increasing strongly across the UK, with prices in London again showing the highest growth. Annual house price increases in England were driven by an annual increase in London of 19.1% and to a lesser extent increases in the South East (12.2%) and the East (10.6%).
Excluding London and the South East, UK house prices increased by 7.9% in the 12 months to July 2014.
On a seasonally adjusted basis, average house prices increased by 1.6% between June and July 2014.
In July 2014, prices paid by first-time buyers were 13.5% higher on average than in July 2013. For owner-occupiers (existing owners), prices increased by 10.9% for the same period.
Jonathan Harris, director of mortgage broker Anderson Harris, says:
"ONS house prices tend to be more historic than the other indices, revealing that there was no cooling in the housing market in July with house prices continuing to increase strongly. However, since then the temperature has definitely dropped as growing uncertainty - both with regard to the political climate and interest rates - takes the wind out of prospective buyers' sails.
"More lenders are cutting their fixed-rate mortgages, however, in response to falling Swap rates and with one eye on year-end targets. Borrowers who are still willing to make a move regardless will find some very competitive deals available."
Jeremy Duncombe, Director, Legal & General Mortgage Club, comments:
“Although these figures show that there has been a slight monthly increase in house prices, it is the longer term trends that we should really be focussing on. House prices have increased by 11.7% in the year to July – a more reliable indicator of demand than the monthly fluctuations we have seen. However, this continuing strong uptick in prices should not necessarily be celebrated. In order to create a healthy and sustainable housing market, house price increases need to roughly match the rate of inflation. Currently, property prices are outstripping inflation significantly.
"The lack of housing supply is undeniably one of the key factors making it harder to buy a house, as increasing demand pushes up prices. Increasing the availability of appropriate housing stock is therefore a core area where industry and government efforts need to be focussed as we go into the last quarter of the year.”
