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House prices rise 1.4% as UK market defies double-dip recession (but it's still grim up North)

Published 20th Jun 2012

£15,000 added to home values since April last year
London prices jump 5%, but North West drops 1.3%
Cost of new dwellings rose 5.1% in the 12 months
Prices paid by first-time buyers increases 1.5%
Figures released by the Office for National Statistics

House prices have seen their biggest annual increase since December 2010 in a sign the market was standing firm in the double-dip recession, figures have revealed.

Values have risen 1.4 per cent in the year to April, adding £15,000 to the price of the average home, according to the Office for National Statistics (ONS).

But the North-South divide was in full evidence again after the cost of a property jumped nearly 5 per cent in London, while there were declines in the North West, and Yorkshire and Humber.

On a seasonally adjusted basis, UK house prices were up by 1.1 per cent between March and April, reversing a decline the previous month.

The figures come after property website Rightmove revealed property asking prices had hit another record high of £246,235, a one per cent rise from April.

That pushed the website's index of newly-listed asking prices 2 per cent higher than they stood in August 2007, the month before the Northern Rock bank run signalled that the financial crisis had arrived in Britain.

Stuart Law, chief executive of property investment firm Assetz, said the figures showed the housing was resilient amid the economic slump.

'These latest findings fly in the face of reports that the UK property market is headed for a double dip,' he told the Daily Express.

'Increased levels of lending in May will help buoy the market with this likely to be sustained following the Bank of England's £100billion injection into the banking system.'

The rises in the south were also driven by more modest gains in the South East and South West.

This was offset by falls in Wales, Scotland and Northern Ireland of 1.1 per cent, 0.3 per cent and 8.1 per cent respectively, while the largest decreases in England were 1.3 per cent in the North West and Yorkshire and Humber, the ONS said in its monthly house price index.

Average house prices in April stood at £237,000 in England, £151,000 in Wales, £129,000 in Northern Ireland and £178,000 in Scotland.

London's average price of £388,000 contrasts with the North East, which has England's lowest average price at £145,000.

The ONS added that the average price of new dwellings rose by 5.1 per cent during the year to April, while the figure for pre-owned homes increased by 1.1 per cent.

The end of a stamp duty holiday for first-time buyers in March meant the proportion of homes bought by this section of the market fell back to 32 per cent in April from 43 per cent the previous month.

The prices paid by first-time buyers were 1.5 per cent higher on average than in April last year.

Source: ' ThisIsMoney '

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