London drives house prices up 5.3pc

Mortgage Introducer

October 28, 2015

Despite talk of the London market slowing down prices rose by 1.8% from August and 9.6% on an annual basis.

House prices in England and Wales reached an average of £186,533 after rising by 1% from August.

At the other end of the spectrum house prices in the North East fell by 0.3% on both a monthly and annual basis.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Prices in the capital saw a significant jump of almost 10% over the year, with the average house price in London hitting almost half a million pounds.

“This is nearly one and a half times the average across the rest of England and Wales, showing first-time buyers or those with small deposits are effectively being priced out of the capital.”

Stephen Smith, director of Legal & General Mortgage Club & Housing, said: “A greater availability of mortgages due to low rates, low inflation and increasing wages has stimulated an increase in demand in the market.

“This would be good news if there were enough housing available for people to buy, unfortunately, however, this is not the case.

“The lack of properties coming on to the market is making the process of buying a home more competitive, which is in turn pushing up prices beyond the level of inflation and limiting the amount of choice for those looking to buy.”

He added: “There isn’t much movement in the market when it comes to existing homeowners, such as second-steppers or last-time buyers, as there are few financial aids or incentives in place to help them to move to a more suitable property if they wish to do so.

“Ramping up supply whilst also stimulating a more fluid market will help to free up more properties, and ultimately ensure a healthier market overall.”

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