House price growth at two-year high

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Property prices increased by 12.1% in the 12 months to the end of June, the biggest annual jump since March 2005, according to the Department for Communities and Local Government.

On a monthly basis house price growth doubled in June, with prices jumping by 1.6%, compared with an increase of 0.7% in May, to put the average cost of a home in the UK at £214,222.

The stronger than expected figures contrast with other indexes which had shown the housing market was slowing down in response to higher interest rates.

Howard Archer, chief UK and European economist at Global Insight, said: "There is no denying that the DCLG house price data are markedly stronger than expected, and suggest that the housing market is proving resilient to higher interest rates."

But he added that the DCLG figures tended to lag behind other indexes, and recent figures for July from Nationwide, Rightmove, Hometrack and the Royal Institute of Chartered Surveyors had all suggested the market was slowing.

He said: "The overall impression than we get from the very latest data and survey evidence is that the housing market has peaked and is gradually and erratically coming off the boil as demand is increasingly pressurised by the rising affordability pressures stemming from higher interest rates, modest real disposable income growth and elevated house prices.

"Furthermore, there is still a very real possibility that that interest rates will rise by a further 25 basis points to 6.0% in the autumn, which would heighten affordability pressures, although much is likely to depend on events in global financial markets over the coming weeks."

But he said there was a danger that tighter credit and sustained financial market turmoil could "hurt" the mortgage and housing markets, increasing the risk of a "sharp slowdown".