The Office for National Statistics (ONS) has reported that the average home cost £218,000 in January, an increase of £13,000 on a year earlier. First-time buyers were paying an average of £183,295, 5.8 per cent more than a year earlier.Price increases for homes in England, where demand continues to outstrip supply, were primarily responsible for the rise in values, with the national average 6.5 per cent higher than a year earlier. It brought the average home price to £235,000.In Wales, there was a 4.2 per cent rise, bringing the average price to £146,000. In Scotland, the average increased by 4 per cent to £142,000, while Northern Ireland saw a 5.7 per cent jump to a £125,000 average price.There continued to be marked regional differences with the average price for a home in London costing £491,000, according to the ONS. This compared to the £124,000 average in North East of England, the lowest in the UK.The East of England recorded the highest regional, annual growth rate of 9.4 per cent, bringing the average to £279,000, but even this paled in comparison with the local authority recording the biggest surge: 21.9 per cent in the Shetland Islands, though the average price there remained a relatively modest £182,000.

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Related news:

• Bristol gets nod as best place to live in UK
• Midlands leads surge in UK property prices
• UK house price growth slowest in nearly four years

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Olympic legacy

Alex Gosling, CEO of online estate agents HouseSimple.com, said the London Olympics in 2012 were still having an effect on London house prices.“The Olympic legacy is still having a massive impact on the region,” he said. “Waltham Forest and Newham have both struck gold with the highest annual average price rises of anywhere in England.“These were boroughs in need of regeneration, and families and first-time buyers are now moving there thanks to the improvements in infrastructure and local amenities.“Of course, this will be galling to many homeowners in the rest of the country who haven’t seen any positive impact from staging the Olympics.“They will be thinking why them and not us. Londoners have already enjoyed massive house price rises without getting a helping hand from the Olympic effect.“Overall, January was a strong month for UK house prices and we saw a surge in sellers marketing their properties.“The worry will be that now a date for Article 50 has been announced, the housing market may hit the buffers. Although the doom-mongers were saying that about Brexit, and the slowdown never materialised.“It seems the UK property market is proving remarkably resilient to shock economic news, and there’s no reason it can’t absorb the fallout over the coming months from Article 50 being triggered.”

Housing shortage continues

Jeremy Duncombe, director of Legal & General Mortgage Club, said, “As house prices begin 2017 on an upwards curve, our country’s housing problem continues to worsen.“This gap is only going to widen if prices continue to follow this trend, preventing many from taking their first steps onto the property ladder.“The root of this ongoing problem lies with supply not being able to keep up with demand. To put it simply, we are not building enough homes. Although the government’s recent housing white paper promised change, we need to start seeing these promises being delivered against. It is vital we start addressing these problems head on and find a workable solution to this major issue.”Richard Snook, a senior economist at PwC, predicted that house price growth over 2017 could be anywhere between 2 and 5 per cent.Get access to our free Global Mobility Toolkit

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