LONDON’S hyperactive housing market is sending prices surging up, rising at more than three times the pace of the rest of the UK during the year to February.
Yesterday, the Office for National Statistics (ONS) announced that house prices in the capital have risen by 17.7 per cent in the year to February, in comparison to a much more modest 5.8 per cent increase across the country excluding London.
The average house price in London has now risen to £458,000, an increase of £63,000 against the same month last year.
Overall, the average house in the UK is worth £253,000, or over £200,000 less than a home in the capital, and a typical London property is worth more three average homes in the north east of England, which are priced at £146,000.
A forecast from PwC indicates that with house prices in the capital rising at such an astonishing pace, the typical home could be worth over £500,000 by the end of the year, at which point an average sale would incur four per cent stamp duty.
The average house in England is now five per cent above pre-crisis peak levels, and 24.5 per cent higher in London. However, in Northern Ireland, where the housing market is most depressed, prices are still 50.2 per cent lower than their 2007 record highs.
“The main challenge facing policymakers is a lack of supply. There are three solutions. Firstly, build up. Secondly, build out. Or thirdly build new towns in commuting distance of London,” said Chris Walker, head of housing and planning at Policy Exchange.