London house prices rise by 'unsustainable' 10% in month
Capital races away from regions as overseas buyers fuel 'frenzied' market for inner-city properties
A 'FRENZY' of buying in the London property market has sent prices rocketing by 10 per cent in a month, fuelling fears that the capital's market is "overheating", the Daily Mail reports.
Figures compiled by the property website Rightmove show that prices in London jumped by a record amount according to month-on-month figures for October, taking the average asking price to £544,232. The rise eclipsed the capital's previous record monthly jump in prices – set in July – by £28,000.
Rightmove says the rate of increase is "unsustainable". It adds to fears that London is facing a 'property bubble' even before borrowers begin taking out loans under the government's Help to Buy scheme in January.
Rightmove says prices are moving fastest in "parts of prime inner London" where the supply of properties for sale is almost exhausted. It says the "frenzy" has been exacerbated by overseas buyers who are looking for a safe place to put their money "amid the troubles of the eurozone".
Westminster, where prices have risen by 11.9 per cent to an average of £1.6m, was London's strongest-performing house price area in October. The asking prices for properties in Kensington, Chelsea, Hammersmith and Fulham recorded increases of 11.8 per cent over the month.
There has also been a "boom" in the London commuter belt, says Metro, where the average price now tops £300,000.
— Lucy Daniel (@CherryLucy) October 21, 2013
Sky News points out that rocketing London prices have not been matched in the rest of the UK. The average rise in home prices in England and Wales during October was just 2.8 per cent, bringing the average asking price to a relatively modest £252,418.
Indeed, the "patchy state" of the housing market was underlined by the fact that prices have fallen in the past 12 months in four areas: Wales, the North, the North West and the West Midlands. The biggest drop was in the North, says the London Evening Standard, where asking prices have dipped by 2.2 per cent to reach £145,094 on average. Sellers in Wales also had to drop their expectations by 1.4 per cent, bringing the average sale price to £165,708.
Rightmove says property prices in London have increased by 13.8 per cent in the past 12 months compared to 3.8 per cent in England and Wales as a whole. ·