House prices rise by 6.1% across the UK as the amount of new properties built fall short of demand by over 73,000.
- House prices continue to grow year-on-year, rising by 6.1% so far in 2015
- Property prices could continue to rise in 2016 due to demand, with a 10% hike possible
- Over 245,000 new properties need to be built in the UK every year to keep up with increased demand
Houses prices in the UK rose by 6.1% in the year to September 2015, according to a report by the Office of National Statistics (ONS).
Prices rose fastest in the east of England, at a rate of 8.5%, and the south-east, growing at 7.4% on the year so far. Increasing by 0.8% between August and September, the average house price in the UK is now £286,000. In comparison, average earnings are growing by 3% a year.
First-time buyers who entered the market two months ago paid prices that were 4.3% higher on average than those in September 2014. The lack of houses on the market and the steady demand are keeping prices high, experts said.
Paul Smith, CEO at Haart Estate Agents, said: “Without a radical move, the core of the UK property market will continue to see house price increases of up to 10% in 2016.”
While the number of homes being built has increased in the past year, the number continues to fall short of what is needed to meet demand, a recent report by the Department for Communities and Local Government showed.
This high demand in the face of low supply is pushing house prices upward, with the trend said to continue solidly over the next five years, with projected growth of 17% by 2020.