Housing market divided in both Europe and UK

THE CAPITAL’S housing market is booming again, leaving the rest of the UK far behind, data showed yesterday.

And elsewhere in Europe, the continent is also witnessing a two-speed housing market, with prices growing in some countries yet continuing to sink in others.

Overall, prices in the final quarter of 2012 were down 1.8 per cent in the Eurozone and 1.4 per cent in the wider European Union area, compared to a year earlier, stats body Eurostat revealed.

Yet prices are soaring in northern European countries such as Norway (up 8.9 per cent), Estonia (up 5.8 per cent) and Latvia (9.8 per cent).

Meanwhile in London, house prices have soared to an average of £439,379 – an increase of £44,682 or 11.3 per cent on the year, according to LSL Property Services and Acadametrics.

Two-speed housing market

The huge leap compares with a rise of just three per cent in England and Wales as a whole, where prices rose £6,701 to an average of £230,078.

And excluding London prices rose just £1,117 on average in the year.

Kensington and Chelsea held its position as London’s most expensive borough, with a rise of 18.2 per cent on the year to an average price of £1.55m.

But Westminster closed the gap with a rise of £346,000 or 39.4 per cent to an average of £878,444.

But not all areas of London recorded improvements. Two boroughs fell, with Redbridge’s prices down two per cent to £279,707. The cheapest property is in Barking and Dagenham, where prices increased 2.8 per cent to an average of £183,103.

“The evidence suggests the disparity between London and the remainder of England and Wales will continue over the next three quarters, reflecting not only the global influences in the London market but also the relative prosperity of the capital,” said Acadametrics’ Dr Peter Williams, adding that the funding for lending scheme is boosting the market.