London property boom causing prices to rise at fastest rate in five years

Data released by the Land Registry has shown property prices in England’s capital to be rising at the fastest rate seen in the last five years.

Data issued by the Land Registry illustrated the rise in cost of an average property in London to have increased 8.1% in February, reaching an all new record high of  £529,882. This means that the average rise in prices of London’s properties since the beginning of the Covid-19 pandemic, is more than £55,000, as reported by the Evening Standard.

February alone saw an £11,600 increase of property value equating to 2.24%, and making it extremely difficult for young buyers in the property market.

Chief Executive of agents Chestertons,Guy Chittins stated: “In February London was seeing a substantial uplift in buyer demand. Buyer enquiries were up 36 per cent in 2021 whilst the number of properties for sale were down 11 per cent. f 2021 was defined by a race for space and people moving out to the suburbs, 2022 has been seeing an absolute boomerang effect with house hunters rushing back into the capital; a change in buyer behaviour that has been accelerated by the return of office workers and international travellers.”

Director of London agents Benham and Reeves Marc von Grundherr, stated: “While the London market continues to trail the house price pack where annual rates of appreciation are concerned, February’s explosive monthly increase provides the first signs of how quickly the tide is starting to turn. We’ve seen a sharp uptick in market activity on the ground for some months , driven by the return of both domestic professionals and foreign buyers, and this is now starting to translate into positive market momentum.

“Although the wider UK market may be susceptible to higher mortgage rates and the increasing cost of living, this is less likely to faze buyers within the capital. So we expect to see a complete role reversal with regard to property value performance as the year goes on.”

Speaking on the duration of the housing price boom, North London agent Jeremy Leaf stated:

“These numbers show house prices continuing on their apparently inexorable upward path but that’s not quite what’s happening on the ground now. Demand is still well ahead of supply but concerns about the rising cost of living, squeezed pay packets and potentially further interest rate rises, are reducing price growth and transaction numbers. Looking forward, we expect activity to return to more ‘normal’ pre-pandemic conditions as supply picks up as part of the usual spring bounce.”