18th November 2014
UK house prices rises accelerated at an annual rate of just over 12% in September, the highest since July 2007 official numbers have claimed.
The Office for National Statistics (ONS) reported that the month-on-month increase in house prices moderated to 0.5% from 0.8% in August and 1.4% in July.
But the year-on-year increase in house prices rose further to 12.1% in September from 11.7% in August and 11.5% in July.
Notably though the data showed house prices fell 1.1% month-on-month in London in September, causing the annual rate of increase to ease back to 18.8% from 19.6% in August and a peak of 20.1% in May.
Howard Archer, chief UK & European economist at IHS Insight said: “While this is still a very strong year-on-year increase, there is now compelling evidence that the capital’s housing market is cooling.”
The data highlighted that annual house price inflation excluding London climbed to 9.8% in September after edging back to 9.1% in August from 9.2% in July. This is up from 7.2% in June, 5.1% in March and 3.3% at the end of 2013.
Archer added: “While it does at least show some recent moderation in month-on-month house price gains, the ONS house price data are appreciably more robust than most other recent house price news. It needs to be borne in mind though that the ONS’ measure of house price inflation lags many of the other measures as it is based on mortgage completions.“
The latest data from the Nationwide show annual house price inflation down to a nine-month low of 9% in October from a peak of 11.8% in June, while the Halifax reported the annual increase down to 8.8% in the three months to October from a peak of 10.2% in the three months to July.
“The stronger-than-expected September ONS data does not materially change our view that house prices will rise at a more sedate rate over the coming months. Most of the latest surveys/data indicate that house prices increases are currently being reined to some degree in by an appreciable moderation in housing market activity from the peak levels seen at the start of 2014,” added Archer.
He continued: “The Bank of England has reported that mortgage approvals for house purchases fell appreciably to a 14-month low in September while latest survey evidence from both Hometrack and the RICS points to a reduction in buyer enquiries. “