London market lifts asking prices to a record high

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The Independent Online

Housing market confidence among sellers is booming, according to figures published today by property site Rightmove.

Meanwhile, a rival survey suggests mortgage demand is climbing. Taken together, the two offer hopes of a nascent recovery – but only in London and certain hotspots across the country.

Average property asking prices soared to a record in April, reaching £243,737. The previous peak of £242,410 was reached in May 2008. However, the research reveals a widening north-south divide in sentiment.

London asking prices have climbed by more than retail price inflation in the last four years, but asking prices have fallen in the rest of the country.

London prices have increased 14.9 per cent to £464,944, well above the retail price inflation over the period of 11.5 per cent. But in the rest of the country prices have slumped 4.3 per cent.

It means the national asking price has actually fallen 9.9 per cent in real terms since May 2008. Miles Shipside, director of Rightmove, said: "This is not a universal sign of a housing market recovery. The richest seams of housing market activity are concentrated around those with access to cash and finance, with a strong bias to the south and London in particular."

Separate findings published today reveal that while mortgage rates are creeping up, that has not slowed demand. The number of mortgage applications rose by 5 per cent in March against the same time a year earlier, according to the Mortgage Advice Bureau. That's despite interest rate rises across the mortgage market, with the average two-year fixed mortgage at 4.15 per cent, up from 3.82 per cent in October, adding over £300 a year to a £150,000 mortgage, according to comparison site Moneysupermarket.