House prices in London pass £500,000 for the first time

Sam Meadows
·2-min read
House prices in London have passed £500,000 for the first time - Hannah McKay/Shutterstock
House prices in London have passed £500,000 for the first time - Hannah McKay/Shutterstock
Coronavirus Article Bar with counter
Coronavirus Article Bar with counter

The average London house price has broken the £500,000 barrier for the first time, according to official figures, as stamp duty cut has fuelled sales despite many movers escaping to the country.

Reports have suggested that people looking for new homes during the pandemic have tended to move out of cities in pursuit of gardens and more space, but figures from the Office for National Statistics (ONS) showed that prices grew by 9.7 per cent in the capital in the year to November.

This was higher than the 7.6 per cent annual increase seen nationwide, as average prices hit a record high of £250,000.

The ONS said that demand for property in inner-London is likely influenced by a broader range of factors than the rest of the UK as it has a relatively high proportion of properties bought for investment, including by cash buyers and overseas investors.

High property prices also means that demand could be particularly responsive to the temporary stamp duty holiday, it added.

Two London boroughs - Kensington and Chelsea, and Brent - recorded annual house price growth of more than 20 per cent.

Nick Leeming, chairman of Jackson-Stops, the estate agents, said: “The market was firing on all cylinders in November and our own branch data reflected this, with completions across our national network up 71 per cent in November in comparison to three months prior.

“In particular, prices in London have rebounded strongly, partly driven by a return of international buyers returning to areas such as Kensington and Chelsea, to beat the additional foreign buyer tax due to be introduced in April.”

There have been calls to extend the stamp duty holiday beyond March because of fears that some buyers who are already part way through the process could miss out.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics warned that there was a clear scenario in which house prices “reversed some of their recent gains” in the next year.

He said the eventual withdrawal of the furlough scheme, mortgage payment holidays and the return of the stamp duty threshold to its former level "likely would leave house prices about two per cent lower by the end of the year than at present".

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