Most people will have mixed feelings about this, but house-price inflation is on the rise again, according to the latest index from the Office for National Statistics, which showed that the annual rate ticked up to 5.7% in June, from 5.6% in May. The breakdown is intriguing: a 6.1% annual rise in England, a 9% increase in Northern Ireland, a 0.8% rise in Wales and a drop of 0.6% in Scotland.
House prices in England are now nearly 17% above their pre-crisis high point. In Scotland, Wales and Northern Ireland, they are below those earlier peaks. A nudge up from 5.6% to 5.7% is not much to write home about, but it is merely a taste of things to come. We had double-digit price inflation from May to October last year, according to the ONS.
City economists, reading the runes of the latest RICS survey, think we are in for more of the same. Fathom Consulting says that two measures in the survey — surveyors’ sales-to-stock ratios and the level of new buyer inquiries — suggests we will have double-figure housing inflation by early next year. By some measures, we’re not that far away from it now. The Halifax has annual house-price inflation at 7.9% for July.
Why is it happening? We are not building enough homes, but that has long been the case. The drought of existing properties coming onto the market is the new factor. Combine a limited supply of homes to buy with easier mortgage availability, a growing economy and high levels of employment, and the only way is up for house prices.
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■ As somebody who hails from the West Midlands, I am gratified to see that three of the top five schools in the league table of housing affordability and educational excellence — determined by GCSE results — produced by the online estate agency eMoov.co.uk are in Birmingham.
Everybody accepts that proximity to good schools drives up house prices. This is particularly the case in London and the southeast. Birmingham, it seems, bucks the trend, mainly as a result of the excellence of the city’s King Edward VI schools.
The schools, none of which is my alma mater, were set up in 1883 with a commitment “to making themselves as accessible as possible to all pupils, whatever their background or circumstances”. So the King Edward VI School in Handsworth, where the average house price is just £107,305, tops the value-for-money scale.
In third place is King Edward VI in Five Ways; King Edward VI for Girls, in Camp Hill, came in fifth. The other places in the top five went to Blue Coat School, in Liverpool (second), and Devonport High School for Girls, in Plymouth (fourth).
To put Handsworth in perspective, it costs nine times as much to live near Beaconsfield High School, in Buckinghamshire.
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■ It’s always fun to keep an eye on the changing lexicon of estate agents’ jargon. I notice that “stunning” is extensively used these days, which always makes me think of low beams and other overhead hazards. The last thing you want when you go into a house is to be stunned. “Unique”, I think, is code for: “We’re struggling to sell this, and so will you if you are daft enough to buy it.” “In the same family for two generations” means: “Prepare yourselves for really outdated fittings, and a kitchen that was state-of-the-art in the 1950s.”
To this can be added old favourites such as “excellent transport links” — next to the motorway and under the flight path — and “a wealth of charming period features”, which means you’ll need to spend serious money bringing it up to date. A “low-maintenance garden” is one that’s mainly concreted over; “well-proportioned living accommodation” means small rooms. Let me know if I’m being unfair.
Tell me what you think at @TheSTHome or david.smith@sunday-times.co.uk