House Price Growth in London Increases Past 10%

The latest figures from Nationwide Building Society show that house prices in the Capital have grown by 10.6% in the last year ñ up from the previous quarter ‘s figure of 7.3%.

The quartlery figures, released today, showed that the average house prices in the UK have gone up by 3.7% in the last year and by 1% in the last quarter.

The divide between the north and the south of the country, with London and the surrounding area (Greater London ‘s annual growth of 9.5% was not far off that in London proper) far exceeding the average for the UK, as well as being more than 50% higher than the growth figure for England specifically, which stood at 6%. Across the UK, the fastest growth was in Northern Ireland at 6.5%, with England a close second and then Wales and Scotland further down at 1.9% and 1.3% respectively.

The average house price in London is now £443,399; significantly higher than the £124,345 average in the north. With the national average £195,733, this marked the widest gap between London and the rest of the UK that Nationwide have ever recorded.

This echoed the recent reports from the Last Registry in August that showed that while prices in the capital had gone up by 1.7% in the previous month, price in the north west had fallen by almost the same amount. The same report also showed, somewhat interestingly, that the fastest growth was seen in the cheaper areas of London ñ proof that the general trend of gentrification in the capital is showing no signs of slowing down.

Robert Gardner, chief economist at Nationwide said that the general trend was indicative of a steady return to normal growth levels in the UK.

He said: “the data in recent months provides some encouragement that the pace of house price increased may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.”

He is, of course, not alone in remaining cautious with regard to the steadily widening gap between supply and demand in the housing market. And indeed among the growing number of mortgages being issued, a significant proportion are buy-let mortgages ñ something that the Bank of England have warned may spell trouble for the economy if house prices end up going down in the near future.

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