London house prices soar by 18.5%

Friday 27 June 2014 18.41
Average property values in London hit £439,719
Average property values in London hit £439,719

London house prices increased at their fastest annual rate in more than 11 years in May, the latest UK Land Registry figures show.

An 18.5% year-on-year upswing, which was almost triple the size of the annual increase seen across the country, pushed average property values in London to £439,719. 

The annual rate of increase seen in London has accelerated on a 15.4% year-on-year increase seen there in April and it marks the biggest jump on this measure since March 2003. 

Across the whole of England and Wales, prices continued to lift at their fastest annual rate since summer 2010, with a 6.7% annual rise taking average prices to £172,035.

Values across the country edged up by 0.4% month-on-month, which marked a slight slowdown compared with April.

Yesterday, the Bank of England unveiled new curbs on the housing market, following concerns about the impact that overheating property prices could potentially have on the economy as it recovers. 

Among the new measures, the Bank said that loans of 4.5 times a borrower's income or higher should account for no more than 15% of new mortgages issued by lenders.

Figures from the Council of Mortgage Lenders (CML) showed that nationally, 9% of new home loans have been for 4.5 times income or more, but this figure is much higher in London, at 19%.

The Land Registry data also shows that 577 properties were sold in London for over £1m in March this year, marking a 26% uplift compared with March 2013.

The new figures also show that at a total of 67,969 across England and Wales, house sales were up by around one third between December 2013 and March this year compared with the same period a year earlier. 

All regions have seen average house prices increase over the last year, from the 18.5% uplift seen in London to a 0.9% increase recorded in the North East, where prices typically stand at £99,319.

In Wales, house prices have edged up by 2.3% annually to reach £116,845 on average. 

As well as recording the biggest annual jump in prices, London also the sharpest month-on-month increase in values in May, at 2.5%, while Yorkshire and the Humber saw the most significant monthly price fall, with a 0.9% tumble taking average prices there to £119,472.

At a local authority level, Merthyr Tydfil in South Wales has seen the biggest fall in house prices over the last year, with a 13.2% annual slide meaning the average house price there is £60,031.

However, the Land Registry report said that Merthyr Tydfil is one of the areas of the country where the figures can be "erratic", due to low sales volumes.