London property prices rise 12.3% and Essex is booming
02-22-2014
Ginetta Vedrickas 
Prices are on the up in Essex (Picture: SHAUN CURRY/AFP/Getty Images)
The price of an average UK home rose to £250,000 by last December, tipping many properties into the three per cent stamp duty bracket.
The Office for National Statistics (ONS) said house prices in December were up 5.5 per cent compared with a year earlier, partly because of a 12.3 per cent increase in London.
The market may be hotting up in the capital but Essex too is seeing a boom according to new figures from Balgores Property Group which has six regional offices in the county. Their research showed that key Essex locations are seeing significant property price inflation.
In Romford, prices have risen by 10 per cent; Hornchurch is also up by 10 per cent; and Basildon is up by five per cent over the last 12 months. According to the Nationwide House Price Index, prices across Essex as a whole are up by 8 per cent year on year.
There has been a surge of lower end properties on the market over the last six weeks, as rising prices have taken many home owners out of negative equity says Martin Gibbon, Balgores’ MD: ‘We have seen a huge increase in the number of cheaper properties like starter and small family homes coming on the market, since the start of the year.
When home owners bought properties at their peak in 2007, they soon found that their properties dropped in value as the recession kicked in and demand fell away.
With prices on the up, many home owners are finding they can trade up and the growth of first-time buyers is also fuelling demand.
First time buyer numbers are at their highest levels for over five years, following initiatives such as Funding for Lending and Help to Buy, which have widened access to mortgages and allowed some people who were previously trapped in renting to break free.
Many agents are concerned over what could happen when interest rates rise.
‘At the moment interest rates are ridiculously low,’ says Gibbon: ‘There is a major problem waiting to happen when interest rates rise – which inevitably they will. With rising prices, home owners could find their home unaffordable.’