Housing costs rising fastest in the East Midlands

By Kevin Peachey
Personal finance reporter

Image source, Getty Images
Image caption,
The East Midlands has recorded the fastest property price growth

The cost of renting or buying a home rose fastest in the East Midlands in the past year, official figures show.

House prices in the region, which includes Nottingham, Leicester and Derby, went up by 7.5% in the year to the end of July.

The region also saw rental prices rise by 2.8% in the year to August - the fastest in Britain - the Office for National Statistics (ONS) said.

Across the UK, house prices rose 5.1% in the year to July, the ONS said.

The rate was unchanged from June, but has slowed since mid-2016. The average UK house price was £226,000 in July.

Tenants' costs

The ONS figures also show that rental prices paid by tenants to private landlords in Britain rose by 1.6% on average in the year to the end of August, down from 1.8% the previous month.

The increases were primarily in England, where rents went up by 1.7%, with Wales recording a 1.3% rise and Scotland seeing a 0.3% increase.

All regions of England saw rents rise over the past year, but the fastest increase was in the East Midlands, followed by the South East (2.6%) and the South West (2.1%).

Image source, PA
Image caption,
The River Trent flows through Nottingham

The second fastest growth in house prices - after the East Midlands - was in the East of England (7.1%).

Prices grew by 7% in the South West, where the average price of a property moved above £250,000 for the first time, according to the ONS figures.

The slowest property price growth was in London, marking a sharp reversal from the house price surge in the capital in recent years.

The average cost of a home was still much higher in London, at £489,000, compared with the typical price of £185,000 in the East Midlands.

Jonathan Hopper, managing director of Garrington Property Finders, said: "It took less than two years for London's booming property market to slide from permanent front-runner to also-ran, to flat last.

"Of course the capital's double-digit rates of annual price growth were always going to be unsustainable. So it's reassuring that the new crop of best-performing English regions are well shy of this level, posting more froth-free gains of 7% over the past 12 months.

"Across the UK a degree of calm is returning to the market. Crucially these price rises are being driven by pragmatism rather than exuberance. The chronic shortage of supply has placed a floor under prices, while demand has been underpinned by a combination of cheap mortgages and a resilient jobs market, which so far has shrugged off the growing inflationary threat."