House prices continued to increase in the year to February, with the South of England beating London as the region with the strongest growth, official figures show.
Property values climbed 7.6 per cent in the 12 months to February but the biggest increase in English regions on an annual basis was not seen in London, according to data by the Office for National Statistics (ONS).
Prices climbed by 9.7 per cent in the capital, but 11 per cent in the South East.
In the East of England prices grew by 10.3 per cent as people priced out of the capital continued to move further away to buy a home.
The average house price in London, the South East and the East were higher than the UK average of £284,000.
The average home costs a record £317,000 in the East of England and £368,000 in the South West.
Shortage of supply and “robust” demand are continuing to put pressure on property prices, according to the ONS.
Howard Archer, chief UK economist at IHS Global Insight, said: “Limited supply of houses has been providing support to house prices - and it will likely continue to do so despite more houses recently coming on to the market.
“While the latest RICS survey reported that new instructions rose for a third month running in February (after falling for 10 consecutive months), it was nevertheless a 13th successive month that demand growth had exceeded supply growth,” he added.
The additional stamp duty costs and increased mortgage regulation have slowed price growth in the prime markets right across the country but especially in London.
Sophie Chick, associate director of residential research at Savills, said that we are at a turning point as an increasing numbers of buyers are moving away from London.
Analysis of Savills buyers in the capital commuter belt shows 30 of sales over the first quarter of 2016 went to people relocating from London compared to just 23 per cent during the same period in 2015.
