U.K house prices continue to rise in August, number of mortgage approvals fall slightly

Housing prices in the United Kingdom continued to rise during the month of August, while the number of mortgage approvals fell slightly during the same period. However, the demand and supply of housing properties stayed at the same level almost, compared to the previous month.

Average house prices in the UK increased by 8.4 percent in the year to August 2016, continuing the strong growth since the end of 2013, data released by the Office for National Statistics showed Tuesday. Further, the average price of a house in Britain came in at GBP219,000 in August, GBP17,000 higher than a year earlier and GBP3,000 higher than in July.

The rise in the residential property prices in the UK was mainly contributed by England, where prices surged 9.2 percent y/y to GBP145,000; Northern Ireland witnessed average price of GBP123,000. In addition to these, the most expensive areas were Kensington and Chelsea, where the average cost of a house was GBP1.3 million. However, the cheapest areas were Burnley in Lancashire and Blaenau Gwent in Wales, where the average house price was GBP77,000.

In contrast to the home prices, the number of mortgage approvals for house purchases fell slightly in August compared with July, remaining at levels seen in early 2015, data from the latest ONS survey showed; the property market has slightly regained momentum after the European Union referendum concerning Britain’s membership in the currency zone.

Further, house prices in Wales rose by 2.7 percent during the past 12 months to an average of GBP145,000. In Scotland, there was a 4.3 percent over the year to GBP145,000. The average price in Northern Ireland is GBP123,000.

Meanwhile, residential properties outside London are selling faster, partly because of stamp duty changes and high prices in the capital. Also, recovery in consumer confidence spurred the country’s housing market.