Attention moves to commuter towns as UK house prices keep climbing

House-hunters are looking to commuter towns as UK house prices keep climbing.

New figures from the Office for National Statistics show that UK house prices have risen 7 per cent in the last year (as of October 2015), a faster rate of annual growth than the 6.1 per cent recorded in September 2015.

Growth was led by a rise of 10.3 per cent in Northern Ireland, followed by 7.4 per cent in England, 1 per cent in Wales and 0.9 per cent in Scotland. Average mix-adjusted house prices in October 2015 reached £300,000 in England and stood at £174,000 in Wales, £196,000 in Scotland and £158,000 in Northern Ireland.

Annual house price increases in England, meanwhile, were driven by an annual increase in the East (10.4 per cent) and the South East (9.5 per cent). Excluding London and the South East, UK house prices increased by 5.6 per cent in the 12 months to October 2015.

The figures are bad news for first-time buyers, who face expensive hurdles if they want to get onto the property ladder – despite measures from the government such as Help to Buy that have made mortgages more accessible than ever. Indeed, in October 2015, the average price paid by a first-time buyer was 5.9 per cent higher than a year ago.

Richard Sexton, director of e.surv chartered surveyors, comments: “The door to the housing market remains open, but many people are still unable to cross the threshold due to a shortage of suitable stock. Mortgage lending remains strong, and with low living costs and recovering wages,  more of us have healthier looking bank balances, while banks are steadily increasing their home lending. Remortgaging continues to be robust as increasing numbers of homeowners switch onto the cheaper deals on offer. ”

For existing owners, prices increased 7.4 per cent for the same period, making it more expensive to move home. For those who can move, the lack of supply is a barrier, adds Sexton, which is driving people to commuter towns instead of expensive London.

“Many are being house-blocked by the lack of homes for sale. In the South, this intense competition for property is driving some buyers away from London, and areas like Cambridge in the East and Reading in the South East are seeing extra buyers scour their centres and suburbs for potential homes,” he adds. “Prices are rising almost everywhere, but these thriving commuter destinations are showing the fastest growth.”