London leads jump in house prices as prime properties soar

Tim Wallace
Follow Tim
ASKING prices rose across the country at the start of 2012, new data revealed yesterday, with prices in London soaring and sales of multi-million pound homes rising.

Asking prices rose an average of £3,104 or 1.8 per cent in the first quarter, hitting £221,387 according to

London experienced the biggest rise, at 5.4 per cent, while prices fell 1.7 per cent in the north east.

The number of mortgage approvals fell in March, according to separate figures from the British Bankers’ Association, but sales of very top end properties continued to rise. Overall home loan applications fell to an 11-month low of 31,888 last month, partly as the rush to benefit from the stamp duty holiday ended.

“This indicates that underlying housing market activity remains muted,” said economist Howard Archer from IHS Global Insight.

“Prices are more likely than not to drift downwards over the coming months in the face of soft economic fundamentals and low consumer confidence. Specifically, we expect house prices to fall by around three per cent by the end of 2012.”

However, sales at the very top of the market increased last year – Lloyds data showed a five per cent rise of sales of houses worth over £2m in 2011, to 1,518.

“Continued demand from wealthy cash rich buyers, both from the UK and overseas, as well as limited supply” have insulated prime properties from the wider economic pressures, said Lloyds’ Suren Thiru.