London drives house price rise

London drives house price rise

Growth of 6.5% in London has helped drive an overall increase in prices of 0.8% in July.

The average asking price reached £162,900, representing a 0.3% annual increase.

This overall increase came despite more than half of regions seeing a year on year fall in prices.

According to the Land Registry figures average prices in London reached £367,785, masking the drops in other regions.

David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, thinks we need to be careful not to be too buoyed by London prices. He said: “ Prices are being supported by investors with cash especially those flocking to prime parts of the capital, but that’s not helping the rest of the UK.

“While property remains a good investment, international buyers continue to drive growth in London in the absence of first time buyers with big enough deposits across the whole country.”

Prices fell year on year by 1.3% in Wales, 0.8% in the West Midlands, 2.5% in Yorkshire and the Humber, 1.9% in the South West and 3.8% in the North East.

Whilst other regions such as the East Midlands and South East saw rises these were considerably more modest than those in London.

Richard Sexton, director of e.surv chartered surveyors, said that it said a lot about the market that a rise of less than 1% was being celebrated.

Mr Sexton pointed to bank lending to those with deposits of less than 15% falling to the lowest level in the last 12 months.

He said: “These lower income buyers, typically first-time buyers, are the beating heart of the housing market.

“Without them, the rest of the market is starved of oxygen and prices are dragged down.

“Only a significant improvement in the economy — and mortgage lending — will be enough to resuscitate activity and help boost prices.”

A report published this week by Hometrack predicted there will be continued downward pressure on prices as availability is likely to outstrip demand for the rest of the year.

The latest figures showed the number of property sales has increased slightly compared with last year.

However, these figures are thought to have been affected by the stamp duty holiday in March.

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