House prices hit record highs in East and South West of England


House prices increased by 0.4% month-on-month in February across the UK and hit new records in the East and South West of England, official figures show.

Property values stood at £284,000 on average across the UK after increasing by 7.6% in the year to February, the Office for National Statistics (ONS) said.

A typical UK first-time buyer paid 8% more for a home in February than a year earlier, at £214,000.

The ONS report said: "The continuing upward price pressures in the housing market may be a result of a shortage of supply and robust demand."

The average home in the East of England reached a new peak of £317,000, while the typical property value in the South West reached a new record of £263,000.

The North East is the only English region where property values are yet to surpass their pre-economic downturn peak. The average property price in the North East is £158,000.

House prices in the other English regions, including London, have fallen back from the record levels seen in previous months. London still has by far the highest average house price, at £524,000 - and values there are 9.7% higher than a year earlier.

Annual house price growth is now stronger in the South East and East of England than in London, with these regions recording increases of 11.4% and 10.3% respectively as the housing market recovery has rippled outwards from the capital.

The average house price in the South East was £368,000 in February.

At a country-wide level across England, Wales, Scotland and Northern Ireland, average house prices sat below their previous peaks in February. 

Across England, house prices increased by 8.2% annually to reach £298,000 on average. In Wales, property values edged up by 2.8% annually to reach £173,000 typically.

House prices in Northern Ireland increased by 2.4% annually, pushing the average price to £157,000. In Scotland, property values dipped by 0.8% annually, taking the average price there to £189,000.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Cheap mortgage rates, a base rate that doesn't look as though it is rising any time soon, and falling unemployment, are giving buyers more confidence to take the plunge, assuming they can find the property they want to buy.

"Limited supply is likely to be the biggest issue they face in the short term but it may be house price growth which is the bigger issue longer term as it continues to outpace real earnings growth by some margin."