The average house price in the UK rose by 4.7 per cent in the year to May, adding £3,300 to the average cost of buying a home.
According to official data from the Office for National Statistics (ONS), house values increased across all regions, with the east of England growing at the highest annual rate of 5.3 per cent. The price rises across the country mean that the average house price has hit £220,713.
The north-east was the slowest growing region in the 12 months to the end of May, experiencing annual growth of just 1.6 per cent, followed by London at three per cent.
Price increases despite uncertainty
Although ONS data indicates annual house price growth has slowed since mid-2016, the figures from the organisation remain more positive that the two to three per cent growth reported by major mortgage lenders Halifax and Nationwide in recent months.
The average price increase in the year to the end of May has come about despite political uncertainty, with Brexit negotiations and a hung parliament following June’s election, indicating the overall resilience of the market.
However, analysts are predicting the house price rises to slow in the coming months, with some industry experts suggesting the average annual price rise may fall to 1.5 per cent by the end of 2017.
Welcome news for first-time buyers
The slowing down of average price increases has been seen as positive news for first-time buyers, improving the conditions for them to get onto the property ladder.
However, recent figures from the English Housing Survey, indicated the picture may not be as positive as it seems, stating the number of people buying their first home dropped from 922,000 annually twenty years ago, to 675,000 households in 2016/2017. The figures also indicated first-time buyers are now more likely to buy with a partner or with the assistance of their parents.
Help is out there for first-time buyers. The Lifetime ISA has been introduced to enable individuals to save up to £4,000 a year, either as a lump sum or by putting in cash throughout the year. This will then be supplemented with a 25 per cent bonus from the government, so those able to save the full allowance will end up with £5,000 before interest and growth is applied. The initiative has proved popular and attracted over 15,000 people to access the product in its first week.