London house prices up, northern prices down

The north-south divide in house prices is widening, according to May figures published today. Rising property values in London helped push the latest national Hometrack house price index into positive territory, despite seven out of 10 regions posting falling or static prices.

Prices climbed 0.6 per cent in May in the Capital, helping prices nationally to a 0.2 per cent increase. East Anglia and the South East posted positive 0.1 per cent increases, but prices remained the same in East Midlands, the South West and West Midlands. Meanwhile a fall of 0.1 per cent was experienced in the North East, North West, Wales and Yorkshire & Humberside regions.

Richard Donnell, director of research at Hometrack, said: "The growth in the number of new sales being agreed slowed significantly in May, but that mirrors the pattern seen in previous years with overall levels of demand and sales agreed slowing after Easter." In London demand has risen ahead of supply over the last three months and prices have climbed 1.4 per cent over the same period. "The impetus for growth in London came from the largely domestic markets of south west, south east and north London where prices grew by 1.1 per cent, 0.7 per cent and 0.5 per cent respectively," said Mr Donnell.

He said the ultimate health of regional markets is reflected in the time on the market, which ranges from 5.1 weeks in London to 13.9 weeks in Wales. "Increased mortgage rates and mounting concerns over the impact of the Eurozone on the UK's economic growth and employment are likely to keep demand and prices in check as we move into summer", he predicted. Outside of London Virginia Water in Surrey has moved to the top of a list of the town with the most homes worth £1m or more.

Some 48.5 per cent of homes in the town are worth six figures or more, boosted by the Wentworth Estate, which encompasses one of Europe's prime residential areas, according to Nigel Lewis, property analyst at Primelocation.com, which published the survey today. Second in the millionaire town list is Radlett in Hertfordshire - with 47 per cent of homes valued at £1m or higher - followed by Cobham in Surrey with 39.5 per cent.

Last year's number one, Beaconsfield in Buckinghamshire, slipped to fifth with 35.8 per cent, just behind Chalfont St Giles – also in Bucks – with 36.4 per cent.

"Most of these areas are home to a high proportion of spacious properties in easy commuting distance of London" said Mr Lewis.