London leads surge in property prices

Housing: Builder stays cautious on prospects despite rising profits and volumes as improved market fails to help brick-maker
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Both Barratt and Ibstock will take comfort from reports issued yesterday which suggest better times ahead for the construction industry.

According to the Land Registry, all types of property increased in value in the three months to June, the latest figures available, with some parts of the market experiencing boom conditions not seen for almost a decade. While the average detached house rose a modest 1.77 per cent in the quarter, and the average terraced house 2.15 per cent, new terraced houses and new flats increased by 13.6 per cent and 17.7 per cent respectively.

Greater London led the surge, with the price of the average London property breaking through the pounds 100,000 barrier after a 5.5 per cent rise in the three month period.

The latest research from Cambridge Econometrics on the construction industry also gave grounds for optimism. According to the half-yearly report, construction output is expected to stop falling this year with modest growth of about 0.5 per cent. Growth of more than 3 per cent is forecast for 1997 and 1998.