London house prices defy the UK slump

 
Julian Harris
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LONDON’S housing market is bucking the trend of falling prices that continues to affect much of the rest of the UK, official data showed yesterday.

Average prices across the country were down 1.4 per cent in January compared to December, leading to an annual increase of just half a per cent.

However, in the capital prices rose by 3.7 per cent compared to the same time last year. Only the east of England recorded a greater jump in prices, rising by four per cent.

While the average UK house price is now £208,552, in London it is now 64 per cent higher, at £342,642, the Department for Communities and Local Government (DCLG) said.

“There is huge inward investment into central, affluent areas of London, and a general lack of stock,” said Robert Bartlett of estate agent Chesterton Humberts.

“And we’re anticipating a considerable surge of middle eastern money into London on the back of problems in that region,” Bartlett added.

Sterling weakness and the perception of London as a safe place to invest continue to attract foreign funds, he said.

The cheapest prices in the UK are still in the north east, where the average fell by 2.4 per cent from December to January, to £132,195 per property.

Northern Ireland was the worst hit region, with prices falling by 14.1 per cent across the year. House prices also fell in Wales, down 1.8 per cent on January 2010.

Across the UK, the underlying trend was for heavier falls as 2010 progressed. Average prices were down 0.4 per cent in the three months to January, compared to the previous three months. In the three months to October, prices fell by 0.2 per cent on the previous quarter.