ONS: House price inflation hits highest level in over two years

House price inflation picked up to 6.7% in the year to end of November, according to the ONS.

According to latest figures from the Office for National Statistics, house price growth picked up 6.7% in November, adding £2,000 to the cost of property in one month.

In October, the figure had fallen to 6.4%, having previously peaked at 9.3% in June.

According to the ONS and Land Registry data, the average price of a UK home in November was £218,000.

Monthly growth was most rapid in London, where prices rose by 1.9%

The average house in London cost £482,000 in November.

The ONS said the figures, which include cash sales, continued the “strong growth seen since the end of 2013”.

The local authority which saw the sharpest increase was Rutland, England’s smallest county by population size, where prices rose by 20.7% over the 12 months.

Aberdeen and Inverclyde, to the west of Glasgow, saw the biggest drop in prices, with a fall of 7.8%

Housing market experts have said they expect house price growth to cool in 2017 amid the economic uncertainty.

The average price for renting a house privately rose by 2.3% in the year to December 2016, unchanged for the fifth consecutive month.

In the south of England, rental costs have been growing more rapidly, while in the north, Wales and Scotland, rental costs have risen more slowly.

According to Paul Smee, Director General of the Council of Mortgage Lenders (CMl), mortgage lending has remained resilient, despite the recent tax changes and uncertainty.

Recent figures from CML show that a total of £4.7Bn was borrowed by first-time buyers in November, a 4% rise on October and a 9% rise compared to the previous year.

Home-movers borrowed £6.3Bn in November, down 5% compared with a year earlier but still a 7% increase compared with the previous month.

Mr Smee said: “November lending reflected stable market conditions. Overall, 2016 did not match recent years in terms of house purchase lending growth, but lending remained resilient through regulatory and political change and aspirations for home ownership remain strong in the UK.

“Our forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the market, but we still predict 1.2 million transactions and a slight increase in gross lending to £248 billion.

“Buy-to-let lending, driven by remortgage activity, saw its strongest monthly lending level since the stamp duty changes on second properties introduced last April. Despite this, we expect buy-to-let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peak as further tax changes take effect.”

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