Annual house prices jump 5.7%: ONS
07-15-2015
By Donia O'Loughlin
Annual house prices increased by 5.7 per cent in the year to May 2015, up from 5.5 per cent in the year to April, data from the Office for National Statistics has shown.
The monthly house price index, published today (14 July), revealed the pace of annual house price growth increased slightly across the majority of the UK in May.
Annual house price increases in England were driven by an annual increase in the east of 9.3 per cent and the south east of 8.2 per cent.
Excluding London and the south east, UK house prices increased by 5.2 per cent in the 12 months to May 2015.
Furthermore, prices paid by first-time buyers were 5.1 per cent higher than in May 2014 and for owner-occupiers, prices increased by 5.9 per cent for the same period.
Stephen Smith, director at the Legal and General Mortgage Club, emphasised that ensuring there is a balance between supply and demand is “key” to the health of the UK housing market, however he pointed out there is currently an imbalance.
“The current level of supply is failing to keep up with demand, which is pushing up house price inflation.
“This trend is likely to worsen in the remainder of the year as strong market conditions, driven by low inflation, low interest rates and rising wages, will generate an even greater surplus in demand.”
As part of the Conservatives’ manifesto, the party pledged to build 200,000 new starter homes, however concerns remain as to how this will be achieved.
Mr Smith said: “It is great to see that the government recognises that there is a lack of supply, as shown by its recent proposals aimed at increasing the efficiency of the planning system.
“That said, this measure shouldn’t be exclusively relied upon to act as a housebuilding catalyst. More needs to be done across the sector to stimulate activity and ensure that there are enough new homes in production to keep up with demand.”