House prices in London soaring above UK trend

HOUSE price inflation in London is more than four times as high as in the rest of the UK outside the south east, according to Office for National Statistics (ONS) data released yesterday.

Prices in London rose by six per cent in the twelve months to April this year, while the UK outside of the south east and London only ticked up by 1.4 per cent, behind consumer price inflation.

Prices rises were below average or actually falling in the north of England, Scotland and Northern Ireland. Wales, however, saw a large rise of 6.2 per cent.

There was a change in the makeup of buyers, with a 4.7 per cent increase in the number of people purchasing property for the first time, after a 1.3 per cent increase in March.

The rise in April is the highest in recent years, during which the proportion of sales involving people acquiring their first house has declined.

The number of existing owners who bought a house over the year rose by 1.9 per cent.

Despite the rise in purchases by people who own no other properties, first time buyers now need an extra £8,400 to secure a property.

“Today’s inflation-busting price increases mean first-time buyers now have an even greater mountain to climb to realise their dreams of owning their home,” said Duncan Stott of the campaign group Priced Out.

In the most recent budget, chancellor George Osborne announced a scheme of mortgage guarantees, called Help to Buy. But some analysts say the policy runs the risk of inflating house prices rather than assisting buyers.