Economy

London house prices surge

Asking prices in UK capital jump by 5.2 per cent in January to an average £541,313 for the best performance since November 2007

House sellers’ asking prices saw their biggest year on year jump since 2007 in February, a property website has reported. Rightmove said that asking prices have risen to £251,964 on average across England and Wales, which is 6.9% higher than a year ago as demand from would-be buyers continues to strengthen. This is the highest annual rate of growth since November 2007. Photograph: David Cheskin/PA Wire

Mon Feb 17 2014 - 08:12

London house prices surged this month, helping national values post their best annual increase since before the financial crisis.

Asking prices in the UK capital jumped 5.2 per cent to an average £541,313 (€395,260) from January, the operator of Britain's biggest property website Rightmove said today. On the year, they rose 11.2 per cent. Nationally, values rose 3.3 per cent from the previous month and 6.9 per cent on the year, the best annual performance since November 2007. The average property coming to market is now priced at £251,964, up by 6.9 per cent (+£16,223) on a year ago which is the highest annual rate for over six years.

“This month’s large rise is exacerbated by being a rebound from the festive-season lull,” said Miles Shipside, a director at Rightmove. “The spring moving season is traditionally the busiest time of the year, so that means agents are likely to advise new sellers to aim high, with the best-selling months ahead of them and strong buyer demand in many areas.”

London is leading the housing market as supply fails to keep up with demand and the capital’s economy powers UK expansion. Bank of England chief economist Spencer Dale said last week that while the market isn’t heading for a bubble, policy makers are “watching it very carefully” after ending mortgage aid through the Funding for Lending Scheme last year.

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Rightmove isn’t the only report to show London leading the property market. A report from Acadata last week showed UK house prices rose to a record in January, with London values rising faster than any other region. The boroughs of Greenwich and Bromley posted the largest monthly gains in the city, with increases of 8.2 per cent and 8.1 per cent respectively. The Merton and Sutton areas had the smallest increases, of 1.7 per cent and 1.8 per cent. While new properties being listed for sale jumped 18 per cent this month compared with a year ago, supply is still failing to keep pace with demand, Rightmove said. As a result, the average available stock per estate agency branch fell to 57 properties from 58, it said.

Bloomberg

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