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London increases cause ripple effect in property market
Asking prices in London rose by 0.7% this month to £436,101, and are 8.0% higher than one year ago. Prices in the capital have risen in nine out of the past 12 months, concrete evidence that London is leading the recovery of the national housing market - with the ‘ripple effect’ spreading out to the South East (prices up 0.6% in the month, 1.4% annually), the East (up 0.4% in the month, 1.4% annually) and the South West (up 0.1% in the month, 1.5% annually).
Within London, the buoyancy of asking prices is driven particularly by the more expensive areas, with five ‘chic’ boroughs registering double digit rises over the past 12 months: Westminster and the City of London (both +14%), Camden and Hammersmith & Fulham (both +12%) and Barnet (+11%). Across the capital, there were monthly rises in 23 boroughs and falls in eight. Two were unchanged. On an annual basis, 30 boroughs experienced an increase in property values, with only Greenwich, Tower Hamlets and Lewisham registering falls.
The increase in asking prices also extends to the first-time buyer market, where average prices have now topped a quarter of a million pounds, with a 1.5% rise to £250,545. This is 3.7% or almost £8,900 more than a year ago - with London bucking the wider national trend whereby entry level homes are cheaper than a year ago. As previously, London remains the toughest place to get on the housing ladder, with properties costing 6.6 times average household income. First-time buyers in London need an effective deposit of almost £134,000 or 3.6 times income - more than anywhere else in the country.
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