London’s house prices are still leading from the front

<a href="http://www.cityam.com/house-prices";>HOUSE prices</a> in the south east continue to outperform the rest of the UK, official data showed yesterday.

Prices in London for March were 5.6 per cent higher than the same time last year, the Department for Communities and Local Government said.

Annualised prices also rose in the east (2.9 per cent) and in the rest of the south east (2.5 per cent), yet fell in many other regions.

Overall British prices were up 0.9 per cent in March, yet actually dropped 1.1 per cent if London and the south east are excluded.

“House prices fell 0.5 per cent in the first quarter of the year as a whole, compared to the last three months of 2010 – when they also dipped by 0.4 per cent on the previous quarter,” said Howard Archer of IHS Global Insight.

The average price of a home in the capital stood at £342,541 in March, the DCLG said, based on completed mortgages. In the rest of the UK, the average price is £185,764.

The supply of housing needs to be allowed to increase to prevent harmful volatility in the UK market, a separate report from the James Rowntree Foundation also said yesterday.