London house prices surge as housing shortage drives ONS average up

The official measure of UK house prices increased by 6.1% in the year to September 2015, the strongest rate of growth since March 2015 and ahead of expectations of a slowdown to 5.4%.

Data from the Office for National Statistics showed a 0.6 percentage point increase from August's 5.5% print.

The ONS house price index figures also revealed the average house price growth slowed to 0.8% between August and September 2015 on a seasonally adjusted basis, down from 0.9% a month before.

London's 7.2% growth in prices was the main reason for the increase in the annual rate of price growth, a full 1.8 percentage points above the growth in the year to August.

"An ongoing shortage of supply coupled with strengthening demand may be behind this increase in the growth rate," the ONS said.

"A number of indicators suggest that the supply of housing remains weak across the UK, with the lack of homes available for sale increasing competition and supporting prices."

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