London and first-time buyers continued to drive the recovery in the property market as the price of the average property edged closer to £250,000, official figures revealed today.

The Office of National Statistics said UK house prices increased by 2.6 per cent in the 12 months to April, slightly down on the 2.7 per cent annual increase the month before. The average UK house price in April was now £238,000, it said.

The ONS added that while house price growth remained stable across most of the UK, prices in London were rising faster, up 6 per cent in the year to April.

The impact of the London and South East property markets was such that it accounted for nearly half the national increase. When the London market was stripped out of the calculations, said the ONS, annual house prices increased by a more modest 1.4 per cent in the month.

First time buyers, considered the engine of the mortgage market, were also continuing to drive prices higher.

On average they paid 4.7 per cent more to get a foothold on the property ladder in the month compared to a year earlier. That was almost four times higher than the 1.3 per cent annual increase in March.

Those already on the property ladder paid an average of 1.9 per cent more in April than the previous year to move home. 

First time buyers now paid £179,000 on average to buy their first home while existing homeowners paid £273,000.

Karelia Scott-Daniels, managing director of buying agents, Manse & Garret Property Search, said the official figures reinforced the extent to which London was driving ‘and potentially distorting’ the public’s perception of house prices.

‘Overall, the property market is much healthier than it was this time last year but take out London and the South East, and the average growth figure falls to 1.4 per cent,' she said.

‘This is a more realistic portrayal of where the market is at. Consumer confidence will continue to be a major contributing factor in terms of where prices go from here.'

Price increases in England and Wales of 2.8 per cent and 6.2 per cent respectively helped offset falls in Scotland and Northern Ireland of 1.2 per cent and 0.8 per cent.

 Aside from London, the region seeing the biggest rise in property prices was the East Midlands where property values have increased by 3.6 per cent in the last year.

House prices rose in eight of the nine English regions with the only region to see a fall in house prices the North East, where property values have declined 1.3 per cent since last April.

In England, the average property value was higher than the UK average at £247,000 edging ever closer to £250,000. In Wales the average property value was £162,000, while in Scotland it was £177,000 and in Northern Ireland the average property price stood at £127,000. 

The official figures follow a slew of positive data from surveyors, estate agents and mortgage lenders.

They also give credence to the findings of property website Rightmove, which said yesterday that homeowner’s average asking prices hit £250,000 for the first time in June, as a result of the upturn in the housing market across the country.

It said homeowners were asking £252,798 on average in June, representing a 1.2 per cent month-on-month increase on the previous record set in May.

Rightmove added average property prices in the South East have leapt 14.8 per cent, or £42,548 in the first six months of this year, to a record high of £329,968.

The property website said the strong growth in the South East the result of the region previously being ‘under-priced’ and because it offered a cheaper alternative to people who had found themselves priced out of London.

Prices in the capital also hit a record high, reaching an average asking price of £515,243, a 10.9 per cent rise on the year to date.

Story courtesy of www.thisismoney.co.uk