London house buying 'frenzy' sees prices jump 10% in just a month

Asking prices for London properties have climbed to £544,231 (DAN KITWOOD / GETTY IMAGES)

Asking prices for London properties have climbed to £544,231 - £30,000 higher than the all-time record set in July.

The amount London property owners expect to get for their home climbed 10.2 per cent over the month, leading a leading housing market analyst to warn that prices in the capital are becoming “unsustainable”.

“Some agents report there is a buying frenzy in parts of prime inner London, but prices growing at around 2 per cent a month – as they have in the last quarter - is not sustainable,” said Miles Shipside of Rightmove.

The online property site’s October survey published today shows something of a recovery across the country with national asking prices rebounding 2.8 per cent to an average £252.418.

With affordability in London stretched, the 5 per cent deposit incentive of the recently-launched phase two of Help to Buy is likely to have greater impact outside the capital as first-time buyers look to purchase property elsewhere.

Average asking prices in even the more affordable outer London boroughs are at £461,937, making them more than twice the average in the rest of England and Wales excluding London, at £226,861.

Meanwhile prime inner London property has reached stratospheric levels at £937,110, yet the average London wage is only 60 per cent higher than the rest of the country.

“In London, the buying power required to get onto or move up the housing ladder means you have to tap into the Bank of Mum and Dad rather than buy courtesy of a helping hand from Uncle George,” said Mr Shipside.

“Indeed, nearly two in five would-be first-time buyers in the capital state that they expect to receive parental assistance.”

He said a housing bubble seems a long way off in the majority of regions, with two having recorded monthly falls (West Midlands and Wales), five still negative year-on-year (North, North West, Wales, West Midlands, South West), and seven in ten regions recording annual price increases which lag behind inflation.