London’s house prices soar 12pc
HOUSE prices in the capital have pulled further away from those in the rest of the country, official figures showed yesterday.
London’s prices jumped by 12.3 per cent in the 12 months to December, more than double the 5.5 per cent rise in the UK as a whole, the Office for National Statistics (ONS) said.
The increase shows prices in the capital are accelerating – in the 12 months to November they increased by 11.6 per cent.
The average price across the UK is £250,000 while London’s average sale in December came in at £450,000. The next highest was the south east where prices hit £306,000.
The £250,000-mark is also the point at which the three per cent rate of stamp duty kicks in, adding an extra hurdle to buyers.
The figures underline the difficulties facing first-time buyers as they have to raise ever-higher deposits to get on the ladder.
A study from Santander shows the average first time buyer will have spent £41,900 on rent before they buy a house.
The fast pace has outweighed the impact of low interest rates to push mortgage costs above rental costs.
The average London rent came in at £1,131 in December, according to LSL Property Services. At the same time the average mortgage repayment hit £1,282, according to the Nationwide.
In England and Wales overall rental costs come in at £745 versus UK mortgage repayments of £648.
Economists expect prices to keep on rising across the UK.
“Housing market activity is being supported by substantially improved consumer confidence, markedly rising employment and extended low mortgage interest rates,” said Howard Archer from IHS Global Insight.