UK house prices 'suppressed', claims property investment firm
Dramatic house price rises in Greater London lend a deceptively buoyant light to the market overall, while prices outside the capital are still lagging behind their pre-2008 levels.
According to the residential property investment specialist London Central Portfolio (LCP), analysis of September's Land Registry House Price Index suggests that fears of a housing bubble - at least outside London - have been overstated.
Although that index shows average house prices at £177,299, still 2 per cent below pre-credit crunch levels, removing London reduces the average to just £133,538 based on average transactions for the year to date.
This is 1 per cent below the stamp duty threshold and 16 per cent lower than December 2007, when the average price was £158,494. In fact, current prices are approximately level with where they were 10 years ago
Naomi Heaton, chief executive officer of LCP, says: 'The furore about a house price bubble over recent months has been totally unhelpful. It is simply not justified outside London and inhibits buying activity, closing the door to first-time buyers.
'Residential property prices in the UK move in cycles. Periods of growth are generally followed by periods of consolidation. We should expect to be entering a new growth cycle given prices are only at the same level as 10 years ago and are, without doubt, suppressed currently.'
Recent data from Nationwide Building Society suggested house price growth had slowed for the second consecutive month, leaving the average UK house price at £189,333 in October.
Heaton adds: 'We will see a bounce back, and it will be strong, and it should be expected rather than alarming.'