Over 50s benefit most from soaring house prices

27/10/2006

House price growth is showing no signs of stopping with average prices across the UK 11.5% higher than they were a year ago.

And with the 50s age group being the largest number of UK homeowners, they will be the biggest beneficiaries as the average asking price for a house reaches a new high of £220,000.

Miles Shipside, the commercial director of Rightmove, which undertook the survey, says: "The drop in asking prices over the summer proved another false dawn for aspiring first-time buyers. The underlying shortage of suitable property in the right locations and the benign economic conditions are creating an environment in which asking prices are likely to continue their upward trend for the foreseeable future."

The report also showed a widening gap between property prices in the North and South. While properties in Greater London are up 19% year on year, and properties in the South West rose by 15%, those in the North went up only 2.2% and in the North West 3.5%.

Mr Shipside said that the current conditions in the housing market were "unique" - a combination of sustained low inflation and low interest rates combined with widespread home ownership. "These conditions help push prices higher and higher," he said. "However, the supply of houses coming on to the market is dropping as prices increase.”

The rate of house price inflation rose from six per cent in July to 7.7 per cent, while inflation in London was slightly higher at 7.9 per cent. The average price for a home in the capital is £286,369. The lowest average price, £142,601, is in the North East.