House prices hit new highs in 10 London boroughs - figures

Published by Jon Land for 24dash.com in Housing

House prices in 10 London boroughs have hit new highs putting further pressure on housing affordability in the capital, according to figures released today.

According to the LSL Property Services/Acadametrics House Price Index for England and Wales, average house prices in London have risen 11.8% since last June with Kensington & Chelsea witnessing the highest increase of 38%, taking the average price of a property in the borough to £1,064,801.

There have also been dramatic rises in the City of Westminster (20.4%), Camden (21.4%), Islington (17%) and Richmond upon Thames (15.4%).

The east London boroughs of Newham and Barking and Dagenham remain the most affordable, according to the figures, with average house prices standing at £217,008 and £176,745 respectively.

Commenting on the figures, Dr Peter Williams, Chairman of Acadametrics, explained: "The 11.8% rise in the average price across London over the 12 month period gives a clear indication of a market under pressure and, although the trend varies considerably between boroughs, the cost of housing in London remains a serious threat to continued economic success.

"It is quite clear that the Greater London Authority sees an increase in housing supply as an important priority. Prices have fallen in only two boroughs.

Commetning further, he said: "Average house prices in London are affected by sales of homes worth more than £1 million.

"Last year, sales of such properties were affected by a stamp duty rise that came into force in April 2011. This year, properties that sold for more than £2 million, particularly important in London, were subjected to a 7% stamp duty from 22nd March 2012. Sales of £1 million plus homes surged last month.

"A return to a more normal market in Greater London depends on factors which are hard to assess. Estate agents have reported an influx of EU purchasers buying homes in central London; not least, of Italians benefitting from lenient Italian tax laws concerning capital gains.

"However, one prominent agent has recently reported that the new stamp duty is dampening interest in London’s best residences. Will the question marks hanging over the Eurozone and the EC affect transfers of cash from Europe?

"First Time Buyers remain conspicuously absent. However, we should see some build up in numbers as more transactions flow through the government backed NewBuy scheme although lenders remain cautious about its overall impact and about how it may support prices which prove unsustainable."

David Newnes, director of LSL Property Services, added: "Money is pouring into prime areas from cash buyers and international investors looking to store their wealth in bricks and mortar. As demand from wealthy buyers continues and first-time buyer numbers remain subdued, the gap between the opposite ends of the market remains.”