UK house prices up 2.2% year-on-year in January

UK house prices increased by 2.2 per cent in the 12 months to January 2013, down from a 3.3 per cent increase in the 12 months to December, according to figures from the Office for National Statistics today.

House prices reached an average of £234,000 in January, up from £229,000 in January 2011, which the ONS says was driven by a 5.5 per cent rise in London and a 3 per cent increase in the east of England.

London remains the most expensive region in England as the average house price climbed to £403,000 in January, from 382,000 in January 2011. London, the South East and the East of England all had prices higher than the UK average price of £234,000.

House prices in the South East rose from £289,000 to £293,000 and prices in the East of England rose from £245,000 to £252,000.

Excluding London and the South East, UK house prices increased by 1.2 per cent in the 12 months to January 2013 and the average UK mix-adjusted house price was £187,000, up from £185,000 in January 2011.

The North East had the lowest average house price at £146,000, up from £143,000.

First-time buyers were paying 2 per cent more for their property compared with a year ago as the average rose to £175,000, up from £171,000.

The average price for properties bought by former owner-occupiers increased by 2.2 per cent in the year to January 2013 to £269,000, up from £263,00.

Legal & General Mortgage Club managing director Ben Thompson says: “It may seem to many that the housing market is a mixed  bag at the moment. Although credit and gross lending remain constrained, there are still plenty of positive indicators. Affordability is likely to improve in the near future and 26 per cent of consumers expect the housing market to be “better” or “much better” in 12 months’ time. This is supported by the latest ONS figures, which show a firming in house prices across the UK.

“Confidence is slowly but surely returning to the market, helped by both the FLS and the increased number of products now available to buyers. Whilst we are on the road to recovery, it is still vital that the importance of the housing market to the economy is recognised in the Chancellor’s Budget. Whether Mr Osborne relaxes stamp duty, introduces mortgage insurance or another form of innovation, the recovery in the housing market it still fragile, and needs as much support as possible to ensure it continues.”