Growth in London property market main driver in 2012

UK house prices rallied during 2012, pushed up by the exceptional performance of London, the South East and East Anglia with average asking prices up 2.4% on last year. The data compiled by Home.co.uk from its own figures, the Council of Mortgage Lenders and the Land Registry also show that the average time a property spent on the market was 129 days, some nine days less than last year.

Prices in Greater London continued to race ahead, up 4.7% since December 2011 and the firm concluded that despite public sector cuts, rising living costs, wage freezes and rises in unemployment, property prices are at last increasing more or less in line with inflation. Its report also confirms that whilst gross mortgage lending is at an 11 month high, it remains well below pre-crisis levels and the number of transactions is down 3.3% on last year.

The year 2012 is now regarded as a landmark year in the slow recovery of the UK housing market with rising prices offering some optimism for vendors planning to move home, although there are alarming regional disparities behind the headline UK figure. The top performing areas of London, the South East and East Anglia, have the enviable combination of rising prices and falling time on the market, indicating that demand for property is much higher. However, out with these top three performing regions, the average asking price is up just 0.9% since this time last year, which means the rest of the UK is still going backwards in real terms.

Quote from PropertyCommunity.com : “Increasing number of Australian buyers are purchasing property in London with a view to renting them out, it is claimed. According to London property search company, Sourcing Property, they are buying as an investment.”

Aside from buyer demand, the strong rental market of recent years has restricted the supply of properties entering the sales market which this has supported prices across the country. However, with gross yields as high as 7% in some locations this side of the property market should continue to shore up asking prices.  ‘Following the stable pricing of 2011, we have tracked rising prices throughout 2012. While the recent price growth is encouraging news, it is important to acknowledge that the gains are largely driven by the demand for property in London and the South East, the main recipients of government stimulus. Prices in the North West and Yorkshire have shown either declines or marginal rises,’ said Doug Shephard, director at Home.co.uk.