London house prices hit new pre-crisis high

House prices in the capital grew at an annual pace of 12.3% to hit £450,000

London house prices have streaked further ahead of the rest of the country to hit a new record more than 20 per cent above their pre-crisis peak, official figures showed today.

Prices in the capital grew at an annual pace of 12.3 per cent in December to hit an average £450,000 according to the Office for National Statistics. This was more than double the 5.5 per cent growth seen across the rest of the UK, where prices stand at £217,000 on average.

Excluding London and the South East, where the property market is also buoyant, house prices were up 3.1 per cent in the year to December.

London is one of only three regions in the UK where prices are above their January 2008 peak, standing 20.3 per cent higher than they were before the financial crisis. The South East and East are 1.9 per cent and 1.4 per cent above their pre-recession zenith respectively.

The latest news comes as the Bank of England reins back cheap funding for the mortgage market and keeps a wary eye on the Government’s Help to Buy scheme.

IHS Global Insight’s Howard Archer said: “Governor Mark Carney has expressed concern about the UK’s past record of house booms and busts, and we believe the bank will take further action later this year to try and dampen the housing market.”