London homes sold for average 99.3% of asking price

Home-sellers in London are receiving 99.3% of their asking price on average, according to new research from Hometrack.

That’s a 10-year high for the capital, and compares with an average of 93% across the whole of Britain.

Demand for homes across Britain has grown by 6.6% in March, but the supply of houses has only increased by 1.9%, fuelling fears of a housing bubble.

>> Five reasons why the London property bubble will burst

Many commentators have pointed to the government’s controversial Help to Buy scheme as a big factor in the increasingly bubbly property market, but Hometrack research director Richard Donnell does not believe this is the case.

He said: “The overall volumes of sales supported by the [Help to Buy] scheme remain relatively small. The real driver of higher house prices is record low mortgage rates and strong demand from first-time buyers and investors who have no property to sell, which is compounding scarcity.

“With average mortgage rates currently at 3% or lower, compared to over 5% before the downturn, households have seen a significant boost to buying power.”

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