London leads gains in British home prices

Rebound from lull in festive season spurs 11.2pc rise in capital's property values

PUBLISHED : Tuesday, 18 February, 2014, 4:38am
UPDATED : Tuesday, 18 February, 2014, 4:47am

London house prices surged this month, helping national values post their best annual increase since before the financial crisis, Rightmove said.

Asking prices in London jumped 5.2 per cent to an average £541,313 (HK$7 million) from last month, the operator of Britain's biggest property website said yesterday. On the year, they rose 11.2 per cent.

Nationally, values grew 3.3 per cent from last month and 6.9 per cent on the year, the best annual performance since November 2007.

"This month's large rise is exacerbated by being a rebound from the festive-season lull," said Miles Shipside, a director at Rightmove. "The spring moving season is traditionally the busiest time of the year, so that means agents are likely to advise new sellers to aim high, with the best-selling months ahead of them and strong buyer demand in many areas."

London is leading the housing market as supply fails to keep up with demand and the capital's economy powers British expansion. Bank of England chief economist Spencer Dale said last week that while the market was not heading for a bubble, policymakers were "watching it very carefully" after ending mortgage aid through the funding for lending scheme last year.

Rightmove is not the only report to show London leading the market. A report from Acadata last week showed British house prices hit a record last month, with London values rising faster than any other region.

The boroughs of Greenwich and Bromley posted the largest monthly gains in the city, with increases of 8.2 per cent and 8.1 per cent, respectively. The Merton and Sutton areas had the smallest gains, of 1.7 per cent and 1.8 per cent.

While new properties being listed for sale jumped 18 per cent this month from a year ago, supply was still failing to keep pace with demand, Rightmove said. As a result, the average available stock per estate agency branch fell to 57 properties from 58, it said.