London house prices reached an all-time high in August, with the fastest annual rate of increase since April 2017.
The mini-boom in the property market that followed the end of lockdown picked up pace in August when prices in Londonrose to an all-time high.
The average cost of a home in the capital increased 3.5 per cent to £489,159, beating the previous record of £488,527 set in July 2017, according to new figures today from the Land Registry.
That is the fastest annual rate of increase since April 2017 and means that the average price has gone up almost £17,000 since the market was reopened in May.
Nicky Stevenson, managing director at state agent group Fine & Country, said: “Here is official confirmation that the market did indeed get up to a canter over the summer months.
Surge: the average London house price has increased by £17,000 since the market was reopened in May (Shutterstock / Ingus Kruklitis)
“The annual rate of growth soared as buyers frustrated by lockdown and lack of space crammed into the market in search of larger properties. That alone explains this year’s sudden rally, as the stamp duty holiday was only introduced in July. A lag will mean any extra demand it created will not be seen in the Land Registry figures before the end of the year.”
Lucy Pendleton, co-founder of London agents James Pendleton, said: “As long as mortgage repayments remain cheaper than the cost of rent, demand to buy a first home will continue to show strength, and first-time buyers everywhere are still able to turn to the Help to Buy scheme if they need to.”
David Westgate, chief executive at agents Andrews Property Group said: “It’s no surprise average annual house prices in August were up on July, as they will have been driven north by the post-lockdown surge in demand.
“September is likely to see an even sharper upswing in average annual completion values as by that point we will start to see the impact of the stamp duty holiday announced in July.
“Now, in October, the market has started to cool off as lenders grow more conservative and higher loan-to-value buyers struggle to secure mortgage finance.
“As we enter the winter months we’re expecting to see a lot more activity from landlords and people who have decent equity in their homes as we transition to a buyers’ market. Cash rich buyers will sense an opportunity and act accordingly.”
Andrew Southern, chairman of property developer Southern Grove, said: “Homes are flying off the shelf and this trend still looks like it has further to run. If true, it will have taken a pandemic to shift transactions up a gear and the irony won’t be lost on the industry. However, this doesn’t have to be a flash in the pan.
This current expansion of activity is not all down to financial incentives and the Government needs to find ways of sustaining this increase in sales beyond the New Year when the March deadline for the end of the stamp duty holiday will be staring buyers down.
“There is already talk of some missing out because of severe delays to the conveyancing process tripping up even those who have had offers accepted and are trying to exchange now.”
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