UK house prices rise 6.2%, inflation breaks 2% target
Staff Writer |
Average house prices in the UK have increased by 6.2% in the year to January 2017, up from 5.7% in the year to December, continuing the strong growth seen since the end of 2013, the Office for National Statistics said.
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However, this still remains below the average annual house price growth seen in 2016 of 7.4%, the ONS said.
Month-on-month, house prices rose 0.8% in January after an increase of 0.7% in December.
The average UK house price was £218,000 in January 2017, £13,000 higher year-on-year and £1,000 higher than last December.
The main contribution to the increase in UK house prices came from England, where house prices increased by 6.5% over the year to January 2017, with the average price there now £235,000.
Wales saw house prices rise by 4.2% over the last year to stand at £146,000. In Scotland, the average price increased by 4% to £142,000, while in Northern Ireland it currently stands at £125,000, an annual increase of 5.7%.
Inflation in February crashed up though the Bank of England's 2% target for the first time in over three years, increasing the pressure on officials to hike interest rates this year.
The UK consumer price index jumped to 2.3% from 1.8% the month before, according to the Office for National Statistics, which was above the consensus estimate for a rise to 2.1% and the BoE's 2% target.
On a monthly basis, CPI rose 0.7% in February, higher than the forecast rise of 0.5% and following a month-on-month dip in January.
CPIH, a new headline measure of inflation, which includes a measure of owner occupiers' housing costs and council tax, also rose to 2.3% from 1.9%, beating the forecast for 2.2%.
Even Core UK CPI, which excludes more volatile prices like energy and food, picked up to 2.0% from 1.6% the month before when economists had only expected a 1.8% increase.
Although CPI has recently looked on course to surge through his 2% target, BoE Governor Mark Carney has stressed that the Monetary Policy Committee was able to look through any period of slightly above-target inflation as wage growth has begun to stutter and is forecast to fall. ■