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Agents have reacted cautiously to the latest Office of National Statistics figures showing that house prices increased by 10.5 per cent in the year to May 2014, up slightly from the 9.9 per cent figure recorded in April.

Industry figures say that these figures are based on completions so reflect sale prices of up to nine weeks ago - before the current slowdown set in.

A balanced view has to be taken as some regions of the country have seen very little house price growth. Places like Lancashire and York are still experiencing annual growth below one per cent. In London prices have begun to fall at the upper end of the market says David Newnes of LSL Property Services.

These figures predate last month's action by the Financial Policy Committee on future mortgage lending but they will undoubtedly heighten pressure for follow-up measures later in the year unless property inflation tails off warns Peter Williams, executive director of the Intermediary Mortgage Lenders Association.

The ONS data shows that house price annual inflation was 11.0 per cent in England, 6.5 per cent in Wales, 3.6 per cent in Scotland and -0.7 per cent in Northern Ireland.

Annual house price increases in England were driven by a record annual increase in London of 20.1 per cent and to a lesser extent increases in the south east (9.6 per cent) and the east of England (8.6 per cent).

In May 2014, prices paid by first-time buyers were 11.3 per cent higher on average than in May 2013. For existing owners who were moving house, prices increased by 10.1 per cent over the same period.


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