John Goodall, CEO of buy-to-let specialist Landbay, believes house price growth has now returned following the release of figures from the Office for National Statistics (ONS)
Growth in house prices rose at a slower pace in June, yet remains close to the 5% average rate seen this year, with the slowest increases coming in London and the north-east.
The average UK house price rose by £2,000 in June to £223,000 compared to the previous month, almost £10,000 higher than a year ago. The annual growth rate has slowed since the middle of last year after the vote to leave the EU, but prices are still outstripping increases in inflation and wages, at 4.9% in the year to June, down from 5% in May.
London saw a £3,000 drop in the average price of a home to £482,000 in June from the previous month, but remains the most expensive region in which to own a property. The value of a home in the capital increased by 2.9% against the same time last year, while the lowest average price continues to be in the north-east, at £130,000, where prices rose by 2.5% over the year.
And Mr Goodall said: “Against expectations inflation has held steady today, stealing the limelight from housing figures, which suggest that house price growth has now returned. Supply and demand remain severely out of kilter, meaning that housing affordability remains one of the most pressing issues facing UK society over the medium to long term.
“The roots of the affordability crisis can be traced back to insufficient construction over the past decade, but a number of other macroeconomic factors are now also playing a part. Wage growth is struggling to keep pace with rocketing inflation, which is hitting people’s pockets and making it harder for aspiring homeowners to afford their first property, as well as discouraging existing homeowners from moving.
"This is pushing more and more people toward the private rental sector to house them while they save, so construction needs to focus not only on more affordable homes for first time buyers, but for the rental sector as well.”