House prices rose by 6.1% in the 12 months to September, according to the Office of National Statistics (ONS).
That means the average house in the UK now stands at a value of £286,000, following steady rolling increases of 5.2% and 5.5% in July and August.
The ONS also revealed this week that inflation in the UK has remained below zero, dampening any fears of rate increases in the short term.
Inflation, as measured by the Consumer Prices Index (CPI), remained at 0.1%, marking the ninth month running that CPI has been at, or close to zero. This does not look likely to change any time soon, following the Bank of England’s suggestion earlier this month that the global economy was weakening.
The ONS added that the Retail Prices Index, a separate measure that includes housing costs, fell to 0.7% in October from 0.8% in September. This is the lowest RPI rate since November 2009.
This period of negative inflation would, suggest some market leaders, offer a short term boost to the economy.
"The benefit of ongoing low inflation is not only that interest rates will stay lower for longer but that real wage growth remains robust, which will in turn continue to boost consumer spending power and help sustain the economic upturn” said Chris Williamson, chief economist at Markit.
"The deflationary picture supports the Bank of England's dovish outlook, which envisages interest rates staying on hold until 2017. However, this outlook is dependent on oil prices and wage pressures remaining low, both of which remain something of an unknown."
With interest rates likely to remain static until at least the middle of next year, there is a real opportunity for mortgage borrowers to take advantage of record low rates.
“Mortgage interest rates are as low as they have ever been at present” adds Andy McBride, Business Development Director at Contractor Mortgages Made Easy. “We’ve been helping contractors to obtain mortgages for ten years now and I’ve never seen such a good time for borrowers as now.”
“With more thirst for lending from banks, in addition to record-breaking low mortgage rates, there is unprecedented value on offer in the mortgage market at present.”
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