New year, new house price boom: Record rises in January as Help to Buy and lack of properties push asking prices even higher
01-22-2014
House prices have soared by record levels this month, it has been revealed
Average asking price is £243,861, compared with £229,429 last January
More than 40 places in UK have seen average price rise above £1million
Most expensive place is Knightsbridge and Belgravia in central London
Booming demand, Help to Buy scheme and lack of properties are to blame
By James Salmon
House prices have soared by record levels this month, adding to fears of a fresh property bubble.
Booming demand, the Government’s Help to Buy scheme and a lack of available properties have helped push up the asking price of the average home by a record £2,406 in January – a month that usually sees prices fall.
The average asking price in England and Wales is now £243,861, compared with £229,429 last January, according to leading property website Rightmove.
Increase: The asking price of the average home has risen by a record £2,406 in January, it is claimed. The most expensive area is Knightsbridge and Belgravia in central London, with an average property price of £4.4million
Increase: The asking price of the average home has risen by a record £2,406 in January, it is claimed. The most expensive area is Knightsbridge and Belgravia in central London, with an average property price of £4.4million
And 43 areas of the country have seen average house prices break the £1million barrier, according to a second report.
Some 34 of these elite areas can be found in London, with the remainder in commuter zones in Surrey, Hertfordshire and Buckinghamshire.
The most expensive area is Knightsbridge and Belgravia in central London, which has an average property price of £4.4million.
But the report from estate agents Savills and analysts Property Database also highlights hotspots in other parts of the country that are rapidly closing in on the £1million club.
Rise: The average asking price in England and Wales is now £243,861, compared with £229,429 last January
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Rise: The average asking price in England and Wales is now £243,861, compared with £229,429 last January
These include rural parts of Oxfordshire, Hampshire and Winchester, as well as parts of Bath, Oxford and Cambridge.
Prices in the Brendon Hills area of Somerset have tripled in ten years to more than £800,000.
According to the respected Rightmove House Price Index, asking prices on homes have risen by 6.3 per cent – or £14,432 – in the past year, marking the biggest annual increase since the start of the financial crisis in November 2007.
Warning: Vince Cable has warned that the Government's Help to Buy scheme should be reassessed in light of London's 'housing boom'
Warning: Vince Cable has warned that the Government's Help to Buy scheme should be reassessed in light of London's 'housing boom'
The 1 per cent rise this month will add to concerns that the housing market is starting to overheat.
It comes as the boss of Legal & General, one of Britain’s biggest investment firms, became the latest senior business figure to call for the Government’s Help to Buy scheme to be scrapped in London, arguing that prices in the capital and the South-East have hit ‘absurd’ levels.
Nigel Wilson said: ‘Help to Buy turbo-charges an already rising market inside London – stopping it would be economically sensible and help prevent the North-South divide getting even wider.
‘The Government should stop stoking up demand, there is already lots of demand and this will create a bubble in the future.’
Business Secretary Vince Cable has also warned that Help to Buy should be reassessed in light of a ‘raging housing boom’ in London.
The launch of the scheme last year has boosted demand for homes by providing guarantees for those with smaller deposits and helping them get on the property ladder.
This surge in demand helped drive the record 1 per cent increase in the asking prices between December 9 and January 11.
Usually prices fall in January by an average of 0.2 per cent.