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London house prices rise at fastest rate on record adding £588 a day, official figures show



Land Registry's monthly index shows monthly surge of 4.2pc in London prices while values across England and Wales remain 5pc below 2007 peak

England and Wales remain 5pc below 2007 peak 

Report warns families facing 'astonishingly high' levels of tax on house purchases

The average house price in England and Wales is now £172,069, according to the Land Registry Photo: PA

By  Jessica Winch

house prices in April rose at their fastest monthly rate since official records began in 1995, Land Registry data showed today.

The monthly gain, of 4.2pc, would have added £17,645 or some £588 a day to the value of the average home in the capital, taking it to £435,034.

The annual gain of 17pc was the highest since April 2003.

The figures, which record completed house sales during the month, also showed that the most expensive sale in April 2014 was located in the London borough of Kensington and Chelsea, where a property sold for £24m.

Across England and Wales, house prices rose 6.7pc in the year to April, the fastest pace of growth since June 2010. The Land Registry said the average house price in England and Wales was £172,069, around 5pc below the peak of £181,572 in 2007.

House prices rose 1.5pc between March and April, the biggest monthly increase since January 2010.

The North East saw the lowest annual price growth, with a 2.9pc increase. The Land Registry said the average price for a house in the North East was £99,001.

Average house price data for England and Wales, January 1995 - April 2014

The figures also showed that after London, the east of England recorded the next strongest annual price growth, with a 7.8pc increase taking average prices to £187,963.

Jeremy Duncombe, director at Legal & General, said: "These figures highlight the two speed housing market that we are currently experiencing in the UK. London and the South East are seeing dramatic house price growth, while other parts of the UK, such as the North East, lag behind."

He added: "In all areas of the country there is a real need to build more houses. At the moment demand outstrips supply, which increases the pressure on house prices and makes it harder for people to own their own home."

Flats and maisonettes recorded the steepest growth by property type, rising 10pc in the year to April to £166,952. Detached homes recorded the lowest increase, rising 5.7pc to £269,666.

The Land Registry figures record actual sales prices rather than mortgage lending data or sellers’ asking prices, and are seen as highly authoritative. Since the data come from completed property sales, the index tends to confirm a trend rather than predicting future price movement.

Nationwide building society warned earlier this week that the London housing market may face a "natural correction" this summer.

Graham Beale, the mutual's chief executive, said on Wednesday: "My view is that in London we will see a natural correction through the summer months. That intense heat does seem to be dissipating a bit. We could be seeing the early signs of a natural correction."

Report warns families facing 'astonishingly high' levels of tax on house purchases

Average house price data for London, January 1995 - April 2014

Hometrack's monthly report, based on a nationwide survey of estate agents and surveyors and also published on Friday, identified slowing house price growth in May. Overall house prices rose 0.5pc in May, compared to 0.6pc growth in April and March, the report found.

Richard Donnell, director of research at Hometrack, said: "Strong price increases, widespread talk of a possible housing bubble and recent warnings from the Bank of England on house price inflation are starting to test the resolve of buyers.

"There are already signs of slower activity in the mortgage market and we expect to see further signs of slowing house price momentum in the months ahead."

New mortgage lending rules came into force at the end of last month, which mean people applying for a mortgage face more rigorous affordability checks.

The government published figures on Thursday for its controversial Help to Buy scheme, designed to help buyers with small deposits. The Treasury said the second phase of the scheme, which supports mortgage lending, had given a boost to the housing market in the regions.

David Newnes, director of estate agency firms Your Move and Reeds Rains said: “The housing market recovery has spread its wings out from London and the South East. Help to Buy has been instrumental - its impact has been felt most strongly in the North West and East; areas where the recovery is still taking hold and there are still lower cost properties to be found."

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