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London's house prices soar to hit new record average of £409,000



Average London house prices have hit a new record

Jonathan Prynn, Consumer Business Editor

The yawning chasm between London’s property “haves” and “have-nots” widened dramatically again last month when average home prices surged by more than £8,000 to hit a new record high of £409,881.

London prices are now rising at 10.9 per cent a year, according to latest Land Registry figures, the fastest rate since July 2010 when the market was recovering from the temporary collapse in the wake of the banking crisis.

The average London home went up in value by more than £40,000 in the year to January — around a third more than the average London salary — fuelled by a stampede of first-time buyers and purchases  by wealthy foreigners, particularly from Asia.

Prices rose rose by 2.1 per cent in January alone with the biggest rises seen in Hackney (20.4 per cent in a year), Waltham Forest (18.3 per cent) and Wandsworth (17.6 per cent).

The number of homes sold for more than £1 million in November increased by 48 per cent to 660 compared with just 520 that changed hands for less than £150,000.

Campbell Robb, chief executive of housing charity Shelter, said: “As house prices in the capital continue to climb, thousands of young people and families watch their dream of a stable home edge even further out of reach, however hard they work or save.” He added that the Government needed “bold solutions” to help give  future generations “the chance of a home of their own”.

Jeremy Duncombe, director at the Legal & General Mortgage Club, said: “The lack of supply in London and the South-east is pushing up prices at a rate that is not sustainable”. But Martin Stewart, director of mortgage brokers London Money, said: “The London property market continues to go through the gears. Each month it’s breaking new records.

“Where’s all this going? For the time being, I’m not worried about the London market overheating”.

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