The Land Registry says the average house price in England and Wales now costs £186,553, an annual increase of 5.3 per cent.
This follows a 1.0 per cent average rise in September.
London house prices rose 1.8 per cent last month - despite the downturn in prime areas - and the typical home in the capital now costs £499,997, up 9.6 per cent annually.
The north east of England saw the only annual price decrease, of 0.3 per cent.
Between April and July this year - the latest Registry data available - sales volumes averaged 71,766 transactions per month; in the same period a year earlier, sales volumes averaged 78,330 per month
Andrew Bridges, managing director of London estate agents Stirling Ackroyd, says the capital is suffering from unique challenges. “A lot of talk about housing plans will dominate the gathering mayoral race, but what is needed is action. Many potential buyers are being squeezed out of the capital – and the supply of new homes is likely to define the prospects of a generation of Londoners.”
Stephen Smith of Legal and General’s Mortgage Club says an increasing range of mortgages has helped stimulate an increase in demand.
“This would be good news if there were enough housing available for people to buy but unfortunately, however, this is not the case. The lack of properties coming on to the market is making the process of buying a home more competitive, which is in turn pushing up prices beyond the level of inflation and limiting the amount of choice for those looking to buy” he claims.