House prices on the up, says government statistician

Average house prices in the UK rose by 1.4% in the year to April 2012, the Office of National Statistics has reported.

The average UK house price stood at £229,000 in April – up 1.1% on April 2011 – but the yearly rise was driven by 4.9% annual growth in London and smaller increases in the South-East and South-West of 2.1% and 1.6% respectively.

There was also a marked 5.1% annual rise in the price of new homes, compared with the overall 1.1% rise for secondhand homes. The average price for a new dwelling in April this year was £216,000 and for a secondhand home £229,000.

Away from the south of England, house prices dropped – by 1.3% in both the North-West and in Yorkshire & the Humber. In Wales, prices dropped by 1.1%, inScotland by 0.3% and in Northern Ireland by 8.1%.

Notably, first-time buyers paid more for their properties in April this year than April last year, with prices up 1.5%. First-time buyer numbers were also affected by the Stamp Duty holiday: in March 43% of properties were bought by first-time buyers, but in April the proportion fell back to 32%.

Charles Haresnape, managing director of Aldermore Residential Mortgages, said: “The ONS House Price Index shows that more robust property prices in London and the South-East are masking significant declines elsewhere in the country, particularly in Wales, Scotland and Northern Ireland.

“Uncertainty over house prices is having a dampening effect on the market and is making prospective house buyers nervous about committing to a house move at the moment. A lack of confidence is a key issue and will remain so until consumers feel that house prices have at least stabilised.”

The ONS, which bases its calculations on the ‘mix-adjusted’ house price data, puts the average house price far higher than the Land Registry, which quoted an average price in England and Wales of £160,417, which it said was a 1% drop.

The Government regards both the ONS and the Land Registry house price surveys as official, but has never explained why it appears to be hedging its bets with two such widely disparate sets of figures.