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Property prices rise by over 13% in the last year

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House price inflation is at its highest level for over 16 years as the market shows no signs of slowing down
Property prices rise by over 13% in the last year

House prices hit £245,432 in June, up by 13.4% compared to a year ago, said Nationwide.

This marked the highest annual rise since November 2004.

The building society added that prices rose by 0.7% in June alone.

Regional data for the three months to June showed that all parts of the UK saw an acceleration in annual house price growth.

Northern Ireland and Wales saw the largest gains, at 14% and 13.4% respectively in quarter two. By contrast Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%.

Robert Gardner, Nationwide’s chief economist, said: “Despite the increase in house prices to new all-time highs, the typical mortgage payment is not high by historic standards compared to take home pay, largely because mortgage rates remain close to all-time lows.

“However, house prices are close to a record high relative to average incomes. This is important because it makes it even harder for prospective first time buyers to raise a deposit. For example, a 10% deposit is over 50% of typical first time buyer’s income. A potential buyer earning the average wage and saving 15% of take home pay would now take five years to raise a 10% deposit.”

Jonathan Hopper, CEO of Garrington Property Finders, added: “In parts of the UK house price inflation has reached fever pitch, with estate agents in the most in-demand rural and coastal areas reporting prices ramping up almost by the week.

“Buyer demand is so strong that those selling desirable properties can expect multiple high offers and fierce competition from buyers.”

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