Cost of a London home climbs to over £400,000

 
Julian Harris
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THE AVERAGE price of a London home broke through the £400,000 mark at the end of last year according to official figures published yesterday, while prices across the country continued to grow this month.

Two separate surveys – released by the Land Registry and Nationwide – told a familiar story for the residential property market, with little sign of price growth slowing.

Land Registry data for December shows homes in London fetching an average price of £403,792, up an eye-watering 11.2 per cent on the year.

House prices across England and Wales were up 1.1 per cent in the final month of 2013, the Land Registry said, when compared to November.

“We expect house prices to increase by around eight per cent in 2014 with gains across the country,” added IHS Global Insight economist Howard Archer. “Furthermore, there is a genuine possibility that this could prove to be a conservative forecast.”

Prices across the UK were 8.8 per cent higher this month than a year ago, Nationwide said yesterday. Compared to December, prices climbed by 0.7 per cent in January.

The company also said borrowers are extending mortgage lengths, one way of easing affordability.

Over half (52 per cent) of mortgages are for terms over 25 years, it said – up from 40 per cent in 2007.

“This may, in part, be to lower their monthly repayments, though the shift may also reflect that people are both living and working longer,” said its chief economist Robert Gardner.

With new buyers being encouraged onto the property ladder by government programmes, Gardner warned: “More than a million first time buyers have entered the market since the Bank rate was cut to a 300 year low in early 2009 – many of whom have yet to experience a hike in interest rates.”