House prices in London and the South East have obscured cooling in other parts of the UK, Richard Sexton, spokesman for LSL property services, has said.
While the average house price across England and Wales has grown 10.7 per cent year on year to hit £274,302, this falls to 4.3 per cent if London and the South East are omitted.
“In absolute terms, the difference would seem to add £88,806 to the average price tag for a home across England and Wales – the highest absolute difference since 1995”, Mr Sexton said.
He compared the annual growth rate – the fastest in London since 2000 – to looking through a kaleidoscope, as it “skewed” the current total housing landscape.
However, the growth rate seems to conflict with research undertaken by online estate agent eMoov, which reported a 50 per cent fall in property demand in the second quarter of 2014 and a 41 per cent fall in property demand in the third quarter of the year.
Mr Sexton said the housing market has improved since the nadir of 2008 but still needs to recapture “some of the vitality of its pre-recession health”.
In March 2014, research conducted by mortgage group HML found that nearly 500,000 UK households were in negative equity.
Adviser view
Emma Sheridan, financial adviser at Milton Keynes-based Scottsdale Consulting, said: “It is true that London has skewed house prices, and it is starting to have a knock-on effect as far as Milton Keynes. At the moment, there are plenty of buyers, but they are struggling to get properties on the market as agents are overinflating prices.”
