South London house prices surging by up to 28% as official figures show national average rising just 8%
- Land Registry figures for October show Lambeth property prices soar 27.9% y-o-y, while Southwark and Lewisham surge 27.8% and 25.9% respectively
- Overall, house prices in UK up 7.7% y-o-y in October
- Separate Nationwide figures show house prices reach record high of £189,388 in November
- Nationwide data indicates annual growth up 8.5% in November, down from 9% in October
By Natalie Wain for Thisismoney.co.uk
House prices in certain parts of the capital are soaring at an annual rate of 28 per cent while the nation average property rises at 8 percent, official figures showed today.
Property values in the borough of Lambeth have surged by by 27.9 per cent year on year to reach £540,819 on average, while those in two other south London boroughs Southwark and Lewisham are up 27.8 and 25.9 per cent respectively.
The Land Registry said that at £460,060 on average, London prices are 18.6 per cent higher than they were a year ago, edging up from a 17.5 per cent annual increase in September but not as high as the 20.6 per cent year-on-year jump seen in the capital in August.
Up, up and away: House prices nudged up again in November to reach another all-time high of £189,388 on average, although the pace of growth is softening, according to Nationwide Building Society
Across England and Wales, property values lifted by 7.7 per cent year on year to reach £177,377 in October, also marking a 0.1 per cent uplift on the previous month.
Meanwhile a property index showed average UK prices had nudged up again in November to reach another all-time high of £189,388, although the pace of growth has softened.
Monthly data from Nationwide Building Society showed home values in Britain were up 0.3 per cent on October's previous peak and were 8.5 per cent higher than they were a year ago, according to the.
But despite prices steadily rising, it is the third month in a row that the pace of year-on-year growth has slowed, in another sign of a cooling market.
Britain's biggest building society said annual house price growth of 8.5 per cent in November was down from 9 per cent in October, 9.4 per cent in September and 11 per cent in August.
The lender's data comes after Halifax data earlier this week predicted house prices will increase by around 3-5 per cent across the UK in 2015, markedly lower than a year-on-year growth peak of 10.2 per cent in July this year.
According to Halifax, the prospect of a hike in interest rates at some point, coupled with a deterioration in affordability in the past year, will be key factors in curbing spiralling prices and demand.
Moderating: Although prices have been steadily rising, it is the third month in a row that the pace of year-on-year growth has slowed, as the market shows signs of moderating
In signs that the prime central areas of the capital are cooling off slightly as buyers become a little more cautious, Kensington and Chelsea, where the typical property price tag is £1.28 million, recorded the weakest annual growth of all the London boroughs, with a 9.5 per cent increase.
According to the Land Registry data, the borough of Kensington and Chelsea is being outpaced by several areas of southern England in terms of its annual percentage increase in property prices, as the property market recovery ripples out and house hunters look for value outside the capital.
In Bristol, prices have lifted by 12 per cent year-on-year; in Hertfordshire values are up by 12.8 per cent; in Kent prices are up by 9.7 per cent; in Oxfordshire they have increased by 11.4 per cent; in Milton Keynes they have risen by 10.7 per cent; in Surrey they are up by 13.6 per cent; in Windsor and Maidenhead they have grown by 12.5 per cent; in South Gloucestershire they are up by 9.8 per cent, and in Reading they have seen a 12.8 per cent annual uplift.
Slough has also recorded a large 16.5 per cent jump in house prices over the last year, which is a faster rate of annual growth than several London boroughs.
Every region across the country recorded higher prices in October than a year earlier, with growth in London generally continuing to be significantly stronger than that seen in the rest of the country.
The South East was the region with the second strongest rate of annual price growth, at 11.4 per cent, followed by the East at 11.0 per cent.
Wales has seen the slowest annual growth in house prices, with a 2.0 per cent increase taking average values there to £188,437.
Typical house prices surpassed their 2007 peak in cash terms in May this year - between then and August they had hit a run of new records.
The strength of the housing market recovery earlier this year took many by surprise, as consumer confidence in the economy increased and mortgage rates remained at cheap levels.
A mismatch between the number of buyers flooding into the market and a shortage of properties to choose from had been seen as a strong factor helping to push up house prices.
But in more recent months, the supply of homes and the number of house hunters appears to leveled off.
The National Association of Estate Agents reported this morning that last month, member agents had an average of 53 properties for sale per branch.
This is 15 per cent higher than the monthly average for the rest of 2014 and the biggest number recorded since October 2013.
Robert Gardner, chief economist at Nationwide, said there is 'something of a disconnect' between the recent slowdown in the housing market and the broader economy, which remains generally upbeat.
He said: 'Forward looking indicators, such as new buyer inquiries, point to further softness in the near-term.
'However, if the economy and the labour market remain in good shape and mortgage rates do not rise sharply, activity is likely to pick up in the quarters ahead.
'The number of mortgages approved for house purchase in September was almost 20 per cent below the level prevailing at the start of the year and 27 per cent below the long-term average.'
Softening pace of change: Prices in the UK were up 0.3 per cent on October's previous peak, and were 8.5 per cent higher than they were a year ago, according to figures from Nationwide Building Society
Howard Archer, chief economist at IHS Global Insight, said: 'With housing market activity appreciably off its early-2014 highs, we suspect house prices will generally rise at a much more sedate rate over the coming months compared to the peak double-digit annual growth rates seen earlier this year.
'Looking ahead, significant restraint on house buyer interest is expected to come from more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the prospect that interest rates will eventually start to rise in 2015.
'Many people may also be deterred from buying houses because they look pricey in a number of areas after recent sharp rises.'
Mark Harris, chief executive of mortgage broker SPF Private Clients, was in agreement with Mr Archer: 'The annual pace of house-price growth continues to slow, demonstrating the softening in the housing market.
'Lenders with an eye on their year-end targets and pipeline for next year are determined to drum up business regardless and are targeting those remortgaging in particular with a flurry of rock-bottom deals launched this week by the likes of Barclays and Santander.
'Assuming interest rates don't rise for the foreseeable future, and Mark Carney himself has indicated that we are looking at the fourth quarter of next year at the earliest, low mortgage rates will continue to support the market.
'Once the uncertainty created by a general election is out of the way, it could be full steam ahead once more for the housing market as all that pent-up demand is released.'