London house prices up 3.6%

The London lettings market could see even greater demand from tenants as house purchase prices move further out of reach of most first-time buyers.

According to the latest figures from Rightmove, prices in the capital rose by 3.6 per cent between December 2012 and January 2013, bringing the average cost of a property to £480,890.

In the last year they have risen by 9.7 per cent, up from an average of £438,324 in January 2012.

This is a much greater increase than any of those seen across the rest of the UK. The East Midlands saw the second highest annual rise at 4.8 per cent.

Meanwhile the North of England, the North West, Yorkshire and Humberside and Wales all experienced price declines.

Within London the borough of Hammersmith and Fulham was the top performer last month, with prices up some 7.2 per cent between December and January.

A typical home in this area now costs £949,619, around £500 shy of £1 million.

Only three boroughs saw prices fall. These were Islington, Camden and Kensington and Chelsea, although the latter still holds the top spot as the most expensive borough in the capital.

The average home here will set buyers back around £2.1 million.

Meanwhile, there has been some good news for those unable to buy in London and forced to rent instead, with average rental costs falling last month.

According to figures from LSL Property Services, typical monthly rents in London stood at £1,087 in December 2012, which was down 1.5 per cent on the previous month.

It is thought that seasonal trends were responsible for the decline, with landlords dropping their rents to avoid having empty properties during the December lull.

But despite the slight fall, David Newnes, director of LSL Property Services, expects the market to remain strong in the months ahead.

"So long as there's an underlying shortage of mortgage finance at high LTVs and a shortage of property being built, there'll be people queuing up to rent a home," he remarked.

"There's still a wave of renters who in previous decades would already be homeowners - and despite more products for first?time buyers becoming available, criteria remain strict."

Posted by Ben Carter
 

Published 23rd January, 2013

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