House prices '˜up five times average earnings'

The Resolution Foundation said its analysis of Office for National Statistics (ONS) figures shows that house prices have increased by 36% since April 2011 across the UK - 5.1 times the 7% increase in average weekly earnings over the same period.

The findings were released as the ONS said UK house prices increased by 9% in the year to March, accelerating from an annual rate of 7.6% in February.

The average UK house price was £292,000 in March, after increasing by 2.5% on the previous month.

The ONS said prices paid by first-time buyers were 9.7% higher in March 2016 than in March 2015.

In March 2016, the average price paid for a house by a first-time buyer was £220,000.

According to the figures released by the ONS, house prices have increased on average over the last year by 10.1% in England to reach £307,000, by 2.1% in Wales to reach £176,000 and by 6.4% in Northern Ireland, taking the average property price there to £155,000.

Both the house price index for England and that for Wales are at record highs, the ONS said. In London, house prices have increased by 13% annually to reach £552,000.

In Scotland, the average property value is £193,000. House prices in Scotland fell by 6.1% annually.

House prices in Scotland and Northern Ireland are both below their pre-economic downturn peaks.

Separate figures from the Council of Mortgage Lenders (CML) showed home mover house purchase lending in March was at its highest levels since 2007.

Home movers borrowed £9.3 billion in March, up 75% on February and 82% compared with a year ago.

Paul Smee, director general of the CML, said: “Activity was distorted in March due to a rush to beat the introduction of changes to stamp duty on second properties in April, alongside the seasonal uptick in activity before Easter. While the increases are substantial, these supercharged levels of activity are likely to be temporary and will fall back over the summer months.”