House prices rising across the UK, London hardest hit

House prices across England and Wales increased by an average of 3.2 per cent in the year to the end of November.

The rise saw the average house price reach £165,411, with Properties in London seeing a 10.6 per cent rise in the year to November, indicating the benefits of renting homes in the capital city.

Much of the rise in the capital was brought about by foreign property investors snapping up multi-million pound homes. This activity pushed the average property price up to £396,646.

London also saw the highest single month rise, with a price hike of 1.8 per cent in November, according to figures from the Land Registry.

The south-east also saw a significant rise in property prices, experiencing a 3.5 per cent increase, pushing typical prices over the £215,000 mark, while Wales also witnessed a price boom, as values increased by 3.3 per cent.

The Land Registry’s figures also showed that house sales have been much stronger than in 2012, with the latest data showing completed sales increased by 24 per cent in 2013.

Much of this is down to the introduction of government schemes such as Help to Buy, which makes it easier for mortgage borrowers with small deposits to buy a home.

However, experts predict that property prices will continue to rise throughout 2014, which will make buying even more difficult and may price some people out of the market.

Figures recently published by the Royal Institute of Chartered Surveyors (RICS) revealed that 60 per cent of Estate Agents forecast prices will keep rising over the next quarter.

Simon Rubinsohn, RICS chief economist, said: "The Bank of England's recent decision to withdraw the Funding for Lending scheme - which allows banks to borrow more cheaply and pass the benefits on to mortgage applicants - could well have some impact on the number of people able to purchase a home."

Published 2nd January, 2014

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