With UK house prices also increasing 0.9% in August to £172,127, all regions of the UK experienced annual house price growth.
However, the gap between northern and southern property values widened to above £100,000 for the first time. London experienced the highest house price growth, followed by East Anglia. The North saw the least.
The news comes as George Osborne gave the Bank of England more powers to intervene if the Help to Buy scheme triggers a house price boom.
Home Fusion managing director Nicholas Ayre said it could be time for London to have its own house price index: “It is no wonder that George Osborne is beginning to get twitchy and is giving the Bank of England powers to put the brakes on Help to Buy if it gets out of hand. Although fears of a house-price bubble are overstated, it’s important not to be complacent.”
UK house prices remain roughly 8% below their 2007 highs, according to the index, but in London, prices rose 8% above the previous peak to an all-time high. Prices in Scotland, Wales and the North of England remain 12% to 14% below their previous peaks, compared to 5% to 7% for southern regions.
Nationwide’s house price index is the second this month to suggest annual house price growth of above 5%. However, the Office for National Statistics has provided a more conservative growth figure of 0.8%.
The Land Registry Index also out today, which marks property completions instead of applications like the Nationwide shows August house prices up 0.1% in August.
Legal & General Mortgage Club managing director Ben Thompson said the increase in house prices was good news for those already on the housing ladder: “However, rising prices will not be such good news for those who are still renting and are hoping to buy in the future.
“Ideally house prices would grow slowly, at or below the level of inflation, over a number of years. This would need to be underpinned by stable economic growth and increased housing supply across the country.“
