House prices in the London area are at their highest level for four years, and the rate of growth in that area is different from the rest of the country.
Across the country, the headline rate of house price growth continues to accelerate. The average house price grew by 0.8% in March and the year on year rate growth now stands at 6.7% – the highest since June 2003.
London’s housing market seems to be distorting the headline figures, with house price growth in the capital far more robust than in the rest of the UK.
Average house prices in London grew by 1.8% over March, the largest monthly increase in the capital for over 4 years.
Property website Hometrack believes that city workers and foreign buyers are bidding up the prices of property in London.
According to Richard Donnel of Hometrack:
“For the last 18 months, London’s been on the up. What’s causing the problem in London at the moment is a real lack of supply. If there’s nothing to buy, and there’s demand and the capacity for people to pay more money, then prices get bid up.
A recent survey by Rightmove showed that prices in London are rising at an annual rate of 22%, compared with less than 5% in the north of the country.
However, the three recent interest rate rises administered by the Bank of England since last summer may start to have some dampening effect, even in London.