House prices in the UK rose by 8 per cent in the year to March, according to official data from the Office for National Statistics (ONS), although the annual increase slowed compared with a 9.2 per cent year-on-year rise to the end of February.
There was huge discrepancy in price rises across the country, the ONS said, with the annual property price increase in London standing at 17 per cent, while prices in Northern Ireland only rose by 0.3 per cent, year-on-year. Taking London and the South East out of the equation meant that property prices were up by 4.7 per cent.
However, the ONS also said that prices fell by 0.5 per cent in March compared with February, the first month-on-month fall for over a year, making the price of an average home £252,000.
There have been calls for some time for the second phase of the Government’s Help to Buy scheme, which supports new homeowners who may have had difficulties getting a mortgage, to be scaled back, and Prime Minister David Cameron has responded to the figures.
He said earlier today (May 20) that the Government would consider any changes proposed by Bank of England Governor Mark Carney, who suggested recently that the scheme could be “pared back”.
The Bank also has the power to control interest rates and a separate report suggests that a rise in the Bank rate could hit hundreds of thousands of mortgage holders, although Mr Carney has indicated that he will not be looking at raising the rate for some time to come.
According to the report from the Resolution Foundation, homeowners in London and the South East, where prices are highest, were the most exposed to an interest rate rise.