IPM Property News

Annual house price inflation in the UK picked up pace in July, according to the latest government figures. The Department for Communities and Local Government (DCLG) said prices rose by 6.0% during the month, up from 5.2% in the year to June.

House price inflation picked up again in July

In particular, prices surged ahead in London, with annual price inflation in the capital rising from 5.8% in June to 7.0% in July.

The average property in the UK now costs £194,454, the DCLG said.

'Firm rebound'

Across England, house price inflation rose to 5.5% in July, compared with 4.6% in June

In Scotland, house price inflation rose to 9.3% from 8.9%.

But price inflation in Northern Ireland and Wales fell back a touch between June and July, but from historically high levels.

In Northern Ireland the rate fell from 19.1% to 18.3%, while in Wales the rate fell from 8.5% to 7.4%.

"The acceleration in house price inflation...confirms that the property market enjoyed a firm rebound during the summer months," said Milan Khatri, of the Royal Institution of Chartered Surveyors.

All regions of the UK are experiencing annual house price growth above the level of the retail price index.

The government figures confirm a trend for accelerating house prices that has also been evident in the Nationwide and Halifax house price indexes for last month.

Many analysts expect the figures to add to the pressure on the Bank of England to raise rates further in the autumn, following last month's 0.25% increase, to curb house price increases in the future.

"Many potential house buyers will be alarmed by the very real possibility that interest rates could rise again before the end of the year. We think these mounting affordability pressures will increasingly outweigh the support to the housing market coming from high employment and a relatively healthy economy," said economist Howard Archer of Global Insight.

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