London prices increase after election
Prices also increased by 16.7% on an annual basis driven by renewed demand, as there were 20 prospective buyers chasing every property. In comparison for the whole of the UK there were 11 potential buyers per home.
With such demand property sales in the capital increased by 5.8% in May, the biggest monthly increase since August 2014.
Paul Smith, chief executive of haart, said: “With reports of consumer confidence on the rise, spending on the up and zero inflation, it’s full-steam ahead this spring for the UK’s, and the capital’s, property market – which are benefiting from the positive glow of the general economic recovery.
“Eleven prospective buyers are chasing each new property instruction across the UK which has caused a near 6% annual increase in property prices – with 20 buyers chasing each property in London the annual price increase is closer to 17%.
“With all this positivity in the air and continued low mortgage rates more people will aspire to buy, and without accompanying fresh supply property will become more unaffordable.”
He added: “First-time buyer activity in London is down significantly with 30% fewer first-time buyer registrations in May 2015 compared to May 2014.
“The result will be that talented young professionals are driven from key areas as they can’t afford to live there.
“This is bad news for local economies and UK plc as a whole and we need at least 200,000 homes built every year across the next Parliament to keep the housing supply crisis under control.”