Property prices in the UK increased by 0.6% in April month on month and by 8.2% year on year, according to the first single index for the whole of the country.
It merges previous indices that were published separately for England and Wales, Scotland and Northern Ireland taking data from the Land Registry, Registers of Scotland, Land & Property Services Northern Ireland and the Valuation Office Agency.
It shows that the average price of a property in Scotland in April was £138,445, up 3.3% year on year and 1.5% month on month while in Wales prices increased by 1.7% year on year and 1.9% month on month to an average of £139,385.
In England, the April data shows an annual price increase of 9.1% and a monthly rise of 0.7%, taking the average property value to £224,731 while in London prices increased by 14.5% year on year and 0.6% month on month to an average of £470,025.
A breakdown of the figures show that the North West of England saw the greatest monthly growth with an increase of 2.3% and the North East saw the lowest annual price growth with an increase of 0.1% while the South West saw the most significant monthly price fall with a fall of 2.8%.
The number of UK home sales continued to grow in the three months to April 2016, rising by 8.3% relative to the preceding three months although sales fell by 45.2% in April 2016 compared with March 2016.
The number of completed house sales in England increased by 1.1%to 56,884 compared with 56,261 in February 2015, the number of completed house sales in Wales increased by 4.1% to 2,796 compared with 2,686 in February 2015 and the number of completed house sales in London fell by 10.5% to 6,926 compared with 7,740 in February 2015.
Due to a period of two to eight weeks between completion and registration of sales in Scotland, volume figures for the most recent two months are not yet complete, so they are not included in the index report.
The creation of a single index for the UK has been widely welcomed but there is still concerns that the time lag amounts to six weeks.
According to Rob Weaver, director of investments at property crowdfunding platform Property Partner, on first viewing, the new single index looks like a fair representation of the market and consistent with current sentiment.
But he pointed out that with transaction volumes at historic lows, the sample size for April will be smaller than normal and added that the next one will give a better indication as to whether or not this month’s referendum on the future of the UK in the European Union has affected sales and prices.
But with historically low interest rates, strong employment and the continuing chronic undersupply of housing, he believes that the upward trend in prices looks set to continue later in the year.
He also pointed out that one official index there should now be a more accurate, reliable picture of the market, which now includes cash buyers and new build properties. ‘It’s been confusing and inconsistent, with valuations varying massively due to different uses of source data. We're hoping the new UK House Price Index will offer a more robust dataset, although the increased time lag of six weeks is a concern,’ he said.
Jonathan Hopper, managing director of the buying agents Garrington Property Finders, believes that the new index has dispelled the widely held view that price rises would slow dramatically in the wake of April’s stamp duty hike.
‘Instead, the picture it paints of price inflation is business as usual especially in London, East Anglia and the Southeast. But in transaction terms things are far less rosy, especially in the higher price brackets where more sales are discretionary and many sellers are holding off putting their properties on the market until after the Brexit uncertainty is past,’ he explained.
‘But even though demand outstrips supply in many areas, the power dynamic is shifting from a seller’s to a buyer’s market as increasing numbers of vendors are forced to reassess their overly ambitious asking prices,’ he added.
Prices will keep rising, according to Ian Thomas, director of online property investment company LendInvest. ‘Without fundamental changes to the way we build houses in Britain, further house price rises like the ones reported today are inevitable,’ he said.
‘All of the talk about the Brexit vote and the uncertainty it brings to the property market has merit. But whatever the result, the drastic undersupply of homes will mean that house prices continue to rise, and home ownership moves further and further away from aspiring home owners,’ he added.