House prices in London jump record 20 per cent

Richmond and Twickenham Times: The average home in the capital now costs nearly half a million pounds. The average home in the capital now costs nearly half a million pounds.

House prices in London rose by a record annual rate of 20.1 per cent in May as overall growth in the UK climbed to 10.5 per cent, official figures showed today.

The average home in the capital now costs £492,000, compared to £262,000 across the country, according to the Office for National Statistics (ONS).

The annual increase for house prices across the UK is the strongest since May 2010 but for London it is the sharpest since records began in 2002.

The ONS said: "House prices are increasingly strong across most parts of the UK, with prices in London again showing the highest growth."

Prices rose by 9.6 per cent in the South East and 8.6 per cent in the East, the figures showed.

Outside London and the South East, annual price increases averaged 6.4 per cent, the highest rate since June 2010.

On a month-by-month basis, values jumped by 0.8 per cent across the country, compared with a rise of 0.3 per cent a month earlier.

The figures also show that first-time buyers face having to pay 11.3 per cent more to get on the property ladder than they did a year ago, with the typical starter home now costing £202,000.

Every region in England saw an annual price uplift, with the lowest rate of 3.9 per cent in the North West.

Prices overall in England rose by 11 per cent over the year, with a 6.5 per cent increase in Wales and 3.6 per cent in Scotland while prices in Northern Ireland fell by 0.7 per cent.

In London, the house price index is 33.7 per cent above the pre-crisis peak level while England has recovered to just 8.9 per cent above and Scotland, Wales and Northern Ireland still lag behind.

The figures come weeks after the Bank of England moved to put curbs on riskier mortgage lending with a new cap on home loans and stronger checks to make sure borrowers can afford repayments.

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