London house prices up 14% in a year, ONS data shows

In London the average house price is now more than £470,000

Zlata Rodionova
Tuesday 14 June 2016 13:56
The issue of affordability is likely to remain 'an insurmountable challenge' for many people
The issue of affordability is likely to remain 'an insurmountable challenge' for many people

House prices across the UK continued to grow in April, with London prices leaping by more than 14 per cent over the past year, according to official figures published on Tuesday.

The average house price in the UK increased 8.2 per cent year on year to £209,054, up 16,000 from the same time in 2015.

In London, which continued to be far more expensive than anywhere else in the country, the average house price is now more than £470,000, up by nearly £60,000 on April last year.

The figures were calculated by a new, more accurate, index based on data from the Office for National Statistic.

The ONS combined figures from the Land Registry, Registers of Scotland, Land and Property Services in Northern Ireland.

The average house price for England was £225,000, an increase of 9.1 per cent on last year compared, with £139,000 in Wales, £138,000 in Scotland and £118,000 in Northern Ireland.

The increase came despite clear evidence that housing market activity has slowed markedly following April’s Stamp Duty increase for buy-to-let investors and second home buyers.

The possibility of the UK leaving the European Union following the referendum on 23 June has not dampened demand, the ONS said.

“Despite the short term uncertainty of next week’s EU referendum, regional property markets are receiving a pre-summer swell, giving homebuyers more choices.

“And while a lift in prices doesn’t spell completely bad news – marking real demand and strong local housing momentum – it does mean more work is needed for first-time buyers,” said Richard Sexton, director of Chartered Surveyor e.surv.

Stephen Smith, director of Legal & General Housing Partnerships, said the issue of affordability is likely to remain “an insurmountable challenge” for many people.

“Simply ignoring this crisis and burying our heads in the sand is not the answer as it will be future generations that will suffer the most,” Mr Smith said.

Recent studies claim that London will become a city of renters by 2025, when only 40 per cent of Londoners will own a home. But according to a report from Countrywide, a lettings network, rent has gone up at a much faster pace than incomes in the capital.

The average cost of renting a one-bedroom home is £746 across Britain, with the figure rising to £1,133 in the capital.

Young Londoners are estimated to spend nearly 60 per cent of their income on rent, the report said.

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