London house prices soar by 18%
04-10-2014
By Paul Thomas
London house prices grew at nearly twice the rate of the UK average in the first quarter, with prices now 20 per cent above their pre-crisis peak.
In the first quarter the capital’s average house price reached £362,699, an 18.2 per cent increase on the first quarter of 2013, when the average price was £306,919.
This far outstrips the rest of the country, which saw prices grow 9.2 per cent from £163,056 in the first quarter of last year to £178,124 in Q1 this year.
London and the South-east are the only two regions that have now passed their pre-crisis peaks, while the rest of the country is 3 per cent below its 2007 peak.
For the third quarter in a row all parts of the UK experienced year-on-year price increases. On a monthly basis, UK house prices grew 0.4 per cent from £177,846 in February to £180,264 in March.
Nationwide chief economist Robert Gardner says: “There is little doubt that the recovery in the housing market is now firmly established, with activity levels picking up and house prices recording their fifteenth successive monthly increase in March.”
Dragonfly Property Finance chief executive Jonathan Samuels says: “The contrast between London and the rest of the UK grows starker by the day. London has almost become a country within a country.
“For average prices in the capital to be twice that of the rest of the UK underlines the extent of the divide. The growing North/South divide has once again been highlighted and is once again very real. The market is increasingly splintering.”
Halifax also issued its latest house price index last week, showing house prices had risen 8.4 per cent year-on-year in March, although prices fell 1.1 per cent – only the third fall in 15 months – to £178,249.
Capital Economics property economist Matthew Pointon says that while house prices are recovering well, the market is not “out of control” on a national level.
He says: “The stable growth in house prices is consistent with other indicators suggesting that while the market is continuing to recover, it is not, at least at the national level, accelerating out of control.”