2014 asking prices still soaring, with growth rate in London close to pre-crisis levels

Asking prices in London hit a new record high for the second consecutive month in March, climbing by 3.6 per cent (£19,818) and recording year-on-year growth of 15.9 per cent – the highest since November 2007, according to the latest Rightmove House Price Index.

The Index also shows an upward trend and year-on-year rise of 13 per cent in the number of properties coming to market in London in 2014, with demand still outstripping supply and fuelling prices. There is also evidence that the London ripple effect is continuing to spread into commuter belt and second home territory, creating upward price pressure in the southern regions.

The average price of property coming to market in London is now £572,348, a jump of £78,713 compared to this time last year and a level not seen since November 2007, before the credit crunch.

Miles Shipside, Rightmove director and housing market analyst comments: “Records keep tumbling in the capital, with a new asking price record being set in London for the second consecutive month. With the annual rate of increase now running at nearly 16 per cent, buyers in the capital considering purchasing an average property will see a price tag nearly £80,000 higher than this time last year. The last time they were going up at this rate was over six years ago, shortly before Lehman Brothers went under and the credit crunch really kicked in.”

Shipside adds: “A strong ripple effect is spreading out from the capital, causing a new wave of record prices for property coming to market in the South East, the South West and East Anglia. Some of this will be buyers who will commute into London, while others will be those looking to invest some of their London property gains further afield, perhaps with a second or retirement home in East Anglia or the South West. Unfortunately for those looking for better value and affordability in the rest of the south, new seller asking prices are on the up there too.”

London prices surge at fastest rate for 11 years during year’s first quarter

London recorded annual house price growth of 18.2 per cent during the first quarter of 2014, which was double the UK’s national average growth of 9.2 per cent, according to one of the UK’s leading lenders.

Nationwide House Price Index for Q1 2014 also confirmed that between January and March the London housing market saw its highest growth rate since Q1 2003, adding that average prices in the capital are now 20 per cent above their 2007 peak at £362,699. Brent saw strongest growth, with prices up 31 per cent year-on-year and average price of £465,502, whilst Harrow was the weakest performing area, with an 8 per cent increase and average price of £334,332.

Looking at the UK as a whole, the Outer Metropolitan was the best performing region outside of London, with annual price growth of 10.6 per cent, closely followed by the Outer South East at 10.1 per cent.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “The price of a typical UK house rose by 2.6 per cent in Q1, after allowing for seasonal effects. Prices were up 9.2 per cent compared with the same quarter of 2013. Although all regions saw annual house price growth in Q1, ten of the thirteen regions have yet to surpass their pre-crisis peaks. London, the Outer Metropolitan and the Outer South East are the exceptions. Annual house price growth continued to surge in London. Prices in the capital are now 20 per cent above their 2007 peak, with the price of a typical London home at £362,699.”

The average house price across the whole of the UK is now £178,124, according to Nationwide.