Home Property London's house prices soar by 6.5% over year

London's house prices soar by 6.5% over year

by LLP Editor
29th Aug 12 4:05 pm

House prices in London have soared over the past 12 months despite a mixture of moderate increases and falls elsewhere in England and Wales, figures have shown.

The average house in the capital now costs £367,785, an increase of 6.5% over the year, helping to mask falls seen in many other regions.

Prices went up by 0.8% in July across England and Wales to an average of £162,900, resulting in an annual increase of 0.3%, according to the figures from the Land Registry.

London’s incredible property boom, largely driven by foreign buyers looking for a safe haven for their money in the global economic turbulence, helped to mask drops seen elsewhere in the country.

Wales saw a year-on-year fall in property prices of 1.3%, while the West Midlands (down 0.8%), Yorkshire and the Humber (down 2.5%), the South West (down 1.9%) and the North East (down 3.8%) also experienced decreases.

The biggest faller of all the regions was the North West, which recorded a 3.9% drop in average house prices to £109,235.

The regions that did see price rises only experienced modest gains. Prices rose slightly in the East Midlands (up 0.4%), the South East (up 0.7%) and the East (up 0.8%).

Mortgage broker SPF Private Clients chief executive Mark Harris said: “The Land Registry data is less gloomy than some of the other house price indices and yet the housing market in parts of the country really is suffering.

“The jury is still out on whether the Bank of England’s emergency funding will have the desired effect.”

London’s rising house prices have left many would-be buyers stuck in the rental market.

But they could also face price rises here, with some private rents expected to go up by 4.5% over the coming year, a survey of landlords suggested.

Tenants struggling to get on the property ladder, combined with weak lending levels to first-time buyers, are expected to contribute to a rise in rents, according to a survey from LSL Property Services.

Four in 10 landlords plan to put up rents over the next year, by 4.5% on average, compared to just one in 100 who are looking to reduce them.

But approximately six out of 10 landlords expect to see rents remain largely unchanged.

LSL Property Services director David Newnes said: “As long as lending to first-time buyers remains in the doldrums, and new house building remains subdued, we won’t see demand for rental accommodation tail off.

“In these conditions, while affordability may increasingly come into play as landlords set rents, they are far more likely to continue to rise than tumble in the coming 12 months.”

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