London property prices double UK average

London property prices double UK average

UK house prices increased by 0.5 per cent in September, meaning average property prices are now £195,585 with growth in London continuing to outpace the rest of the UK.

The annual pace of average UK house price growth picking up modestly to 3.8 per cent, from 3.2 per cent in August.

Robert Gardner, Nationwide’s chief economist, said the data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth.

He said: “However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.

“Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries.

“Therefore it is unsurprising that most surveyors expect a pickup in house price growth in the months ahead.”

According to the Royal Institution of Chartered Surveyors, property prices are set to climb by 6 per cent this year, double what it predicted at the beginning of the year.

Rics attributed this to the continued imbalance between falling new instructions to sell and rising buyer demand.

According to the survey, 37 per cent more members were expecting prices to continue to increase over the next three months and 76 per cent over the year.

Mr Gardner added growth in London property prices is continuing to outpace the rest of the UK, as the annual rate of growth in London is currently the highest in the country and accelerated to 10.6 per cent in the third quarter, up from 7.3 per cent in the second quarter.

He said: “The slowdown in house price growth since the middle of 2014 has not been confined to, nor has it been driven primarily by, developments in London. Indeed, the capital has continued to see price growth at or above the rate in the UK overall over the past four quarters.”

The gap between London house prices and the rest of the UK has “continued to reach new highs”, Mr Gardner said.

“The price of a typical home in the capital (£443,399 on our measure) is more than double the UK aggregate and more than three and a half times the price of the typical property in the cheapest UK region (the north of England).

“Taking a wider view, regional house price performance was mixed in the third quarter.

“Eight UK regions recorded a slowdown in the annual rate of growth, while five saw acceleration. Most parts of the country continued to see annual house price gains - the exceptions were Scotland and the north west which both recorded small declines.”