London house prices rose at almost double the average rate for England and Wales last year, with the average price of property in the capital now totting up to a lofty £514,097.
The Land Registry’s House Price Index in December showed that the cost of getting on to the ladder in London rose by 12.4 per cent compared to the previous year and 2.1 per cent month-on-month.
Across England and Wales, the average house price is £188,270 – a 1.2 per cent month-on-month increase and a 6.4 per cent rise year-on-year.
But the greatest annual price increase in December was in Reading, the Berkshire commuter town, with a movement of 17.1 per cent.
While average prices have increased, the number of properties getting bought and sold across England and Wales has declined.
From July 2014 to October 2014 there was an average of 84,517 sales per month. In the same months a year later, the figure was 80,691.
Jeremy Leaf, a former RICS chairman and north London estate agent, said: “The decline in number of property transactions continues to be a worry. If people aren’t able to move in and out of the market when they want to, there will be an inevitable knock-on effect for the rest of the economy.
“With the high cost of moving, continued shortage of supply and affordability issues with tougher mortgage criteria, this situation looks unlikely to change any time soon.
‘While the increase in London property prices highlights the shortage of housing in the capital, the biggest hike in values in the past 12 months was in Reading, where prices are rising because of its commutability. Buyers are finding better value than in London although if property prices continue to rise at the same pace that may no longer be true.”