London rebound underpins UK house price gains

PUBLISHED : Wednesday, 17 December, 2014, 7:37am
UPDATED : Wednesday, 17 December, 2014, 7:37am

British house prices extended their longest stretch of gains since before the financial crisis as London rebounded from a slowdown earlier in the year, according to Acadata and LSL Property Services.

The average value of a home in England and Wales rose 0.8 per cent to £280,733 (HK$3.4 million), the 17th consecutive month of increases, the groups said. That was the most since more than two years of gains until October 2007.

The report indicates that London's priciest districts are regaining momentum after the Bank of England put limits on riskier mortgage lending in June and speculation about the introduction of a so-called mansion tax damped demand.

The LSL data contrasts with other housing reports, with the Royal Institution of Chartered Surveyors saying London's property market is still weakening.

From a year earlier, British house prices increased 11.3 per cent last month. Excluding London and the surrounding southeast, national values climbed 5.7 per cent, with the gap between that measure and the overall gain the largest on record.

"These figures are spurred on by London and the southeast, where the housing recovery has been fast-tracked," said David Newnes, a director of an LSL unit. "After a temporary hiatus at the highest tiers of the property market, growth has rallied again in the capital."

In October, London house prices advanced 1.9 per cent on the month and 19.7 per cent on the year. Kensington and Chelsea surged 5.3 per cent on the month, while the City of Westminster saw a 4.2 per cent increase.

British housing transactions declined 20 per cent from October to 70,500, the groups estimated.