House prices close to all-time high amid reports new Help to Buy scheme to blame for 'soaring' demand from buyers

Prices rose by 3.8 per cent year-on-year to reach £245,000 on average

House prices surged at their fastest annual rate in almost three years in September and remained close to an all-time high recorded the previous month, official figures have shown.

Prices rose by 3.8 per cent year-on-year to reach £245,000 on average, marking a slight decrease on the peak of £246,000 recorded in August, according to the Office for National Statistics (ONS).

The annual uplift is the highest seen since October 2010 and comes amid calls for the Government to ease the upward pressure on house prices being fuelled by its new Help to Buy scheme by building more homes to meet demand.

The figures were released as the Royal Institution of Chartered Surveyors (Rics) called for urgent action to address the supply of homes, which it said is "nowhere near" that which is needed to cope with "soaring" demand from buyers.

Rics said the number of surveyors reporting house prices lifting across the country has surged to an 11-year high as the Government's new Help to Buy scheme fuels "soaring" demand from buyers.

The ONS said that on a seasonally-adjusted basis, UK house prices were unchanged between August and September.

House prices in London have soared by 9.4 per cent over the year to reach £434,000 typically.

The year-on-year increase reflected growth of 4.2 per cent in England, where typical prices reached £255,000, and 1.4 per cent in Wales, where prices were £163,000 on average.

Prices in England have fallen slightly from record levels seen the previous month but are still 0.8 per cent higher than their previous 2008 peak, the ONS said.

The rises were offset by annual falls of 1.1 per cent in Scotland, where typical prices fell to £181,000 and 1.5 per cent in Northern Ireland, where the average price edged down to £127,000.

Prices in Scotland, Wales and Northern Ireland are still well below the peaks seen in the property boom. Northern Ireland has seen the sharpest decline and prices are still at 50 per cent below their previous peak.

The ONS figures also show that first-time buyers face having to pay around 5.3 per cent more for a property than they did a year ago. The typical price paid by a first-time buyer in September was £184,000.

Prices of properties bought by home movers have risen at a slower pace of 3.2 per cent, with the typical price paid by this sector standing at £281,000.

Further evidence of the housing market recovery was also shown in a report by the Council of Mortgage Lenders (CML), which said that lending to home-buyers between July and September was at the strongest levels seen since 2007.

Home loans worth £27.1 billion were handed out in the third quarter of this year, which is the highest quarterly figure the CML has recorded since winter 2007.

Paul Smee, director general of the CML, said the "renewed strength" in the market will help it to gather momentum into 2014.

There are also fresh signs that growing demand from aspiring buyers has boosted sellers' confidence about sticking to their asking prices.

Property search website Zoopla reported that fewer than one in three homes (31 per cent) currently listed for sale has had its original asking price slashed.

This represents a fall from two in five (40 per cent) homes which had had their asking prices cut in November two years ago. The average percentage discount has also fallen to 6.4 per cent, from 7.4 per cent in 2011.

But seller confidence still varies and Zoopla found that just one in five (20 per cent) London properties for sale has had its asking price reduced, compared with nearly half (43 per cent) in Preston.

According to the latest Rics UK housing market report, nearly three-fifths (57 per cent) of surveyors are seeing price rises, marking the highest percentage since June 2002.

Sales volumes are at their highest levels in more than five-and-a-half years as more people move to snap up properties, Rics found.

Simon Rubinsohn, Rics chief economist, said: "The amount of homes currently up for sale is still nowhere near enough to keep up with demand and, in order for the market to function correctly, this imbalance urgently needs to be addressed."

Roger Harding, director of communications, policy and campaigns for charity Shelter, also urged the Government to take "decisive action to tackle our shortage of affordable homes".

Mortgage applications worth £365 million have been received so far by the UK's major lenders in the first month of the new Help to Buy scheme.

NatWest owner Royal Bank of Scotland said yesterday that it has taken 1,075 applications, with almost three-quarters of customers looking to buy their first home. Halifax, which is part of Lloyds Banking Group, has received 1,309 applications.

The Government is offering £12 billion-worth of guarantees under Help to Buy to encourage lenders to offer mortgages to credit-worthy home buyers with deposits as low as 5 per cent.

So far, a handful of products have been launched under the scheme with other major lenders, including Santander and Barclays, planning to come on board at a later date.

Housing minister Kris Hopkins insisted the Government is "pulling out all the stops to get Britain building".

He said: "Housing starts are now a third higher than at the same time last year and it is clear house-building will remain a critical part of our economic recovery."

PA

Sport
Thiago Silva pulls Arjen Robben back to concede a penalty
world cup 2014Brazil 0 Netherlands 3: More misery for hosts as Dutch take third place
Sport
Robin van Persie hands his third-place medal to a supporter
Van Persie gives bronze medal to eccentric fan moments after being handed it by Blatter
News
Ian Thorpe had Rio 2016 in his sights
people
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
scienceScientists have developed a material so dark you can't see it...
News
Monkey business: Serkis is the king of the non-human character performance
peopleFirst Gollum, then King Kong - now the actor is swinging through trees in Dawn of the Planet of the Apes
Arts and Entertainment
Blackman: Landscape of children’s literature does not reflect the cultural diversity of young people
booksMalorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Life and Style
Once a month, waistline watcher Suran steps into a 3D body scanner that maps his body shape and records measurements with pinpoint accuracy
techFrom heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
News
Soft power: Matthew Barzun
peopleThe US Ambassador to London, Matthew Barzun, holds 'jeans and beer' gigs at his official residence. He says it's all part of the job
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
News
Gavin Maxwell in Sandaig with one of his pet otters
peopleWas the otter man the wildlife champion he appeared to be?
News
Rowsell says: 'Wearing wigs is a way of looking normal. I pick a style and colour and stick to it because I don't want to keep wearing different styles'
peopleThe World Champion cyclist Joanna Rowsell on breaking her collarbone, shattering her teeth - and dealing with alopecia
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

C# Developer (HTML5, JavaScript, ASP.NET, Mathematics, Entity)

£30000 - £45000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Integration Developer (.NET, Tibco EMS, SQL 2008/2012, XML)

£60000 - £80000 per annum + Benefits + Bonus: Harrington Starr: C# Integration...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?