London prices surge

Robyn Hall

September 26, 2014

Prices in the capital saw an increase of 2.7% in August alone, as they reached an average of £476,000.

In August the most expensive property purchased was in Chelsea, selling at £17,750,000.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As far as the Land Registry is concerned, the London property market shows no signs of slowing.

“While there may be a slowdown in the £2m-plus market regarding concerns about a mansion tax if Labour win the general election, the mainstream market motors along with borrowers taking advantage of cheap mortgage rates and an improving economy, which brings better job security.

“However Mark Carney also said this week that the first interest rate rise is getting closer so borrowers should not be complacent.”

Prices for the UK as a whole increased by 8.4% annually to August and 1% monthly, peaking at £181,383.

Repossession volumes decreased by 36% in June 2014 to 794 compared to 1,238 in June 2013.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Rising prices are good news for second steppers, with our analysis of ONS data showing every 1% increase in house prices is giving mortgaged homeowners another £23bn of housing equity, freeing those who have been trapped in poor deals and unable to move.

“For first-time buyers, improved access to mortgage finance as lenders regain the appetite that was lost during the financial crisis keeps the property market within reach.

“Wider availability of high loan-to-value loans also ensures those who cannot save for a large deposit are not barred from buying their first home.”

Regionally the North East saw the lowest annual price growth of 3%, while the South West and North West recorded monthly price falls of 0.1%.

Richard Sexton, director of e.surv chartered surveyors, said: “The capital is a different species to the rest of Britain. Many other regions have only just found their legs, and are still moving very slowly.

“Up and down the country, first-time buyers are clamouring to get onto the property ladder. Demand from the bottom up is fuelling price growth.

“And Help to Buy is feeding this hunger, by encouraging more higher LTV lending.

“However, more could be done to support first-timer buyers, especially in the capital.

“We need much more new housing stock to prevent prices climbing too quickly. Revisiting the ageing stamp duty thresholds would also help.”

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