London house prices rebound in March

Demand rising for property on the outskirts of the British capital as buyers seek more value for investments

PUBLISHED : Monday, 20 March, 2017, 8:45pm
UPDATED : Tuesday, 21 March, 2017, 8:05pm

London property prices rebounded to an all-time high this month, boosted by areas on the periphery of the British capital, according to Rightmove.

The average price of a home coming to market climbed to £649,772 (US$805,000) in March, rising 1.4 per cent from a month earlier, the property website said on Monday. Values have increased 0.9 per cent annually, even as those in central boroughs stagnated. The best performing areas were Ealing and Harrow, while Kensington and Chelsea saw the biggest declines.

London’s housing market underperformed the rest of the country during 2016 as stretched affordability, Britain’s vote to leave the European Union and tax increases on investors weighed on demand.

“It is this trend of buyers looking further afield for value that is pushing up demand and therefore prices in many outer boroughs,” said Miles Shipside, a director at Rightmove. “With nine months having elapsed since the referendum and stronger demand returning to the market, there are signs that prices are becoming more resilient.”

Nationally, asking prices rose 1.3 per cent on the month to an average £310,108, with the Midlands leading the gains. While UK prices gained 2.3 per cent from a year earlier, that is significantly weaker than the 7.6 per cent pace seen in March 2016.

Even as prospects for the housing market brighten, British consumer spending is set to slow to a four-year low in 2017 as inflation, weak wage growth and the impact of welfare cuts hit households, according to a separate report by the EY ITEM Club. Real consumer spending will rise 1.7 per cent this year, compared with a 12-year high of 3.1 per cent in 2016, it said.