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Property values in capital rising at fastest rate in two years as Brexit 'deep freeze' starts to thaw

Jonathan Prynn

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London house prices are now rising at their fastest pace for more than two years, bringing to an end a long Brexit “deep freeze” for the capital’s property market.

The average value of a home in London went up 2.3 per cent, or £10,670, to £483,922 in the year to December, according to the Land Registry.

It was the biggest percentage increase since October 2017 and leaves prices less than £5,000 below the all-time high of £488,527 reached in July 2017.

However, government statisticians said the figures could have been skewed by a mini-boom in the sale of London mansions towards the end of last year and did not necessarily reflect conditions in the market as a whole.

The Office for National Statistics pointed out that 27 per cent of sales in December were of properties worth more than £900,000.

In the previous two months, homes in this price bracket accounted for 20 per cent and 21 per cent of sales.
The ONS said: “Purchases of very high-value properties may be particularly affected by considerations such as uncertainty, including around the effects of the UK’s withdrawal from the EU, expectations of actual or potential tax changes, and other factors.”

Nevertheless, property commentators said the monthly jump of 1.6 per cent in December showed green shoots were starting to appear after an unprecedented 18 consecutive months of falling prices up to August.

Lucian Cook from agents Savills said: “There does seem to be real evidence of a bottoming out of the market. It looks like inner London turned around in September and outer London in December.”

David Westgate from Andrews Property Group, said: “While the London figure may have been skewed slightly by sales of extremely high-value properties, the capital as a whole appears to have rediscovered its mojo.”

However, hopes of an interest rate cut receded today after a surprise acceleration in the pace of inflation from 1.3 per cent in December to a six-month high of 1.8 per cent in January.

Experts said further rises would significantly reduce the chances of an interest rate cut in the near future.

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