Average London house price rises above £600,000

Photo: EEPaul

The average London house is now worth more than £600,000 for the first time, new research reveals.

In April 2016, the average property price in England and Wales climbed 8.9 per cent, according to Your Move and Reeds Rains, the fastest year-on-year growth recorded since December 2014. The capital raced even higher, though, with prices jumping 11 per cent year-on-year – more than any other region. Indeed, while the index reports a record high for house prices in 9 of the 10 regions, with overall average home values now at £298,030, London values have now broken through the £600,000 barrier for the first time.

“This rapid growth means the average house price in London has almost doubled over the past seven years, rocketing up from £321,917 in April 2009,” comments Adrian Gill, director of Your Move and Reeds Rains estate agents. “In Waltham Forest, the average house price has soared by 113 per cent over this time period – more than any other London borough. These kinds of huge hikes in home values in London mean that Sadiq Khan will now face a serious challenge to deliver his promise of increased affordable housing in the city. Across London, it’s been the more affordable areas which have seen some of the steepest increases in house prices annually, as the capital’s residents seek out cheaper properties.”

The nationwide growth arrives despite concerns from some that the market would be weighed down by uncertainty surrounding the UK’s EU referendum. At the same time, the market is also set for a slowdown in activity, following a rush from landlords and second home buyers to beat the deadline for the new stamp duty surcharge on additional home purchases.

“Property sales have slowed in April, readjusting after the rush of interest from landlords in March,” acknowledges Gill. “With an additional 30,000 home sales made in the previous month and buyers snapping up most of the properties on the market, the current pause in transactions was to be expected. While March saw a record 97,500 home sales – the most since November 2007 – this April there will have been an estimated 20,000 fewer sales than usually expected for the month.”

Some homeowners may now decide to wait until after the EU vote before selling their homes, suggests Gill, despite significant demand from buyers. “We could see this shortfall continue until June.”

A shortage of properties on the market, though, with fierce competition for the ones that are available, has seen price growth continue to pick up pace.

House prices jump £700 in January

11th February 2016

Property values in England and Wales jumped £700 in January, as price growth continues to pick up pace.

Prices rose 0.2 per cent month-on-month, a small increase, but enough to take the average value over the £290,000 barrier. Indeed, property values have risen 5.5 per cent over the last 12 months, reaching an average of £290,642.

Last June, average prices crossed the £280,000 marker, but it was way back in August 2014 that the £270,000 threshold was crossed.

“We’re passing these milestones in quicker and quicker succession,” says Adrian Gill, director of Reeds Rains and Your Move estate agents.

“This hastening is good news for homeowners, but means it’s getting harder for those still hoping for homeownership. In the last 12 months there’s been a 5.5 per cent upswing in average property prices compared to just a 2.1 per cent rise in average earnings.”

Bournemouth posted the biggest increase month-on-month, with prices rising 2.9 per cent (£7,000) – the equivalent of £226 each day.

Gills attributes this upswing to the expanding tech sector in the city.

“Last year Bournemouth was named the fastest-growing digital economy in the UK. This ‘silicon beach’ surge has created more well paid tech jobs in the area – spurring the recent rise in home values, as more people look to move into the neighbourhood,” he comments.

While the South East remains the region with the fastest year-on-year price rise at 7.7 per cent, London has now swept to second place. The typical property in London has increased in value by £34,485 in the last year – almost equal to the £35,333 median gross annual earnings in the capital. This 6.2 per cent hike in the capital’s home values has been driven by activity in the more affordable outer boroughs.

Regionally, though, there has been a significant increase in sales in the North West, rising 8.8 per cent in the last quarter of 2015, compared to the same period in 2014, as buyers seek more property for their money.