Data from the Office for National Statistics (ONS) shows UK prices rose by 3.1 per cent in the first half of this year to £242,000 on average. On a monthly basis, values rose by 0.4 per cent.
House prices in London have soared 8.1 per cent year on year, but growth remained patchy elsewhere and Scotland slipped 0.9 per cent while Northern Ireland fell 0.4 per cent.
Analysts have suggested that the slight drop in Scotland might be linked to the delay in rolling out of schemes such as the government’s Help to Buy north of the Border. Wales recorded the strongest annual house price growth of the UK nations at 4.3 per cent, while England saw a 3.3 per cent rise.
The fall in Scotland compared to elsewhere is likely to be welcomed by first-time buyers, who are nervous about warnings that house prices are set to recover.
The ONS report was released as a separate survey by the Royal Institution of Chartered Surveyors (Rics) said it saw house prices rise at their fastest pace since their 2006 peak last month.
David Marshall, a business analyst at the Edinburgh Solicitors’ Property Centre, said: “House prices in Edinburgh are pretty flat or falling slightly. In Aberdeen, they are probably outperforming the rest of the market. Broadly speaking, we would probably want to see house prices appreciating gradually and keeping pace with wages.”
Mortgage lenders yesterday said that the number of first-time buyers is at its highest level since the financial crash in 2007. Several reports have pointed to a buzz in housing market activity following the launch of various government schemes, such as Funding for Lending and Help to Buy, which make it easier to access a mortgage.
However, some experts warned that the government’s schemes could come back to “bite” and fears have been raised that the measures could lead to a property bubble, with borrowers overstretching themselves.
ONS figures show that the average price paid by a first-time buyer has risen by 3.9 per cent over the past year to £182,000.
House prices in the West Midlands saw the biggest annual increase of the English regions after London, with a 3.1 per cent rise there topping the 2.9 per cent increase in the South East.
A mortgage price war has broken out with lenders offering some of their lowest ever rates. Figures from the Council of Mortgage Lenders yesterday showed a record take-up by borrowers of fixed-rate mortgages.
Some experts have been advising that with the prospect of interest rates remaining at their historic lows for some years, borrowers should be considering longer-term fixed-rate products such as five-year deals.