Asking prices for London homes soar

The rise in asking prices for homes in London recorded in September was the greatest for seven months, according to a report.

Home sellers in the capital raised the amount they wanted for properties as investors looked for safer options during the financial market turmoil, Rightmove said. A lack of properties for sale also contributed to the rising prices.

Asking prices in London increased 2.4 per cent on August’s figures, when they dropped by 3.4 per cent, the report said. Across the country, asking prices increased by 0.7 per cent in September following a 2.1 per cent dip in August.

Record-low interest rates have helped support the value of houses, but lenders demanding large deposits and waning consumer confidence has stopped the housing market from picking up momentum. Rightmove said cash-rich buyers investing in property in light of the troubled financial markets in Europe have helped to bolster asking prices in London.

Writing in the report, Rightmove commercial director Miles Shipside said: “London’s buoyant property market looks set for a brisk autumn as buyers chase a more limited choice of fresh properties.

“With the continuing turmoil in the financial markets, and the threat of a Greek default, we are seeing a flight to safe assets.”

Some 28 of London’s 32 boroughs experienced an increase in asking prices in September, with Merton and Sutton among the areas to record the largest rises. The number of homes on sale in London fell by 12 per cent to 17,966 compared to September last year, according to the report.

Rightmove said: “This is a significant reduction in supply that will maintain the upwards pressure on pricing in the capital if it continues.”

Asking prices in London went up 7.2 per cent on the previous year to average £427,889, the report said. This compares to an increase of 1.5 per cent across the country, with the average property costing £233,139.

Shipside said: “The continuing lack of attractive mortgage products with higher loan-to-value ratios is stalling a housing market recovery, as first-time buyers or existing homeowners with little or no equity are faced with years of saving to raise the necessary deposits.

“A housing market recovery seems as far away as ever.”

The report measured the prices of 117,061 homes put up for sale on its website between August 7 and September 10, accounting for some 90 per cent of the market, the company said.