London house prices jumped at the end of last year, with average values breaking the £500,000 threshold for the first time.
Average house prices in London rose four per cent between October and November last year, according to the latest official data.
The annual price rise of 9.7 per cent took the average property value in the capital to £513,997.
Experts said the rise was driven by the return of international buyers racing to beat the additional tax due to be introduced this year.
It was also boosted by house hunters aiming to complete transactions before the stamp duty holiday deadline in March.
PwC economist Jamie Durham said: “The stamp duty holiday is a particular benefit in London and is likely to have played a significant part in this strong price growth, as the higher average house prices means that more stamp duty is typically due.
“Despite a weak economy and the considerable impact of Covid-19, this data shows that the housing market has continued to perform strongly, buoyed by the stamp duty holiday, pent up demand and preference changes brought about by the pandemic.”
UK house prices jumped 7.6 per cent annually to £249,633, with a monthly increase of 1.2 per cent.
Ross Counsell, director at Good Move, said: “We can put this growth down to the influx of people looking to buy property in 2020, both before the end of the Stamp Duty Holiday in March, and due to many people simply looking for more spacious properties, particularly in rural locations, during lockdown.
“Mortgage approvals too are at an all-time 13 year high, and with such high demand for properties and mortgages, naturally comes higher average house prices.”