A major property website has seen London house prices soar to a new high this month, beating their previous record by nearly STG30,000 ($A50,479) and fuelling fears that the capital is overheating.
Asking prices in London saw an “unsustainable” 10 per cent month-on-month increase in October, pushing typical asking prices in the capital to STG544,232, leapfrogging a previous high set in July by more than STG28,000.
The website put much of the increase down to a “frenzy” of activity in parts of prime inner London as overseas investors look for a safe haven to place their cash, which is “leaving the shelves bare”.
Across England and Wales, asking prices rose more gently by 2.8 per cent month-on-month, following two months of falls, to reach STG252,418 on average.
Prices across the country are 3.8 per cent higher than they were a year ago, although in London they have shot up by 13.8 per cent over this period, Rightmove said.
Despite the overall upward march in prices, Rightmove said that “a bubble seems a long way off in the majority of regions”.
The patchy state of the housing market was still shown, as four areas recorded year-on-year falls in house values – Wales, the North, the North West and the West Midlands.
The North recorded the biggest year-on-year drop, with asking prices falling by 2.2 per cent to reach 145,094 on average. Sellers in Wales have dropped their asking prices by the second biggest amount over the last year, with prices falling by 1.4 per cent annually to typically reach 165,708.
After London, the East Midlands saw the second biggest annual increase in house prices, with a 6.0 per cent annual uplift taking them to 171,913 on average.
The findings come after the Council of Mortgage Lenders (CML) reported last week that lending activity is at its strongest in five years and the Office for National Statistics (ONS) said that UK house prices reached an all-time high of STG247,000 in August, surpassing a previous 2008 peak.
