Average London house prices jump £28,000 in biggest monthly rise for 27 years

In a remarkable bounce back, average London sold prices saw a rise of 7.5 per cent in the year to August — an increase of £36,469 in real terms.
Daniel Lynch

The average price of a home in London shot up at a rate of almost £1000 a day in August as London’s property market roared back to life with the biggest monthly rise since 1994.

The average cost of a home in the capital jumped 5.6 per cent in the month from £498,083 to a record £525,893, adding almost £28,000 to its value.

The annual rate of increase is now 7.5 per cent, the fastest since August 2016 in the immediate aftermath of the EU Referendum in 2016.

Property experts said the remarkable bounce back was fuelled by growing demand from domestic buyers after the lifting of restrictions in July and the return of foreign investors.

The London market has been in the doldrums since the shock Brexit result unsettled buyers and the pandemic drove thousands to look for more space outside the capital. Rishi Sunak’s stamp duty holiday also had more impact on regional markets outside the metropolis.

Marc von Grundherr, director of agents Benham and Reeves, said: “There are two predominant factors driving this market revival. The first is a return to normality both in a social sense, but also with regard to our professional lives and the physical workplace. This has led to growing demand from domestic buyers which has laid a firm foundation for onward growth.

“The second is an influx of foreign buyers who have had little choice but to sit on their hands during the pandemic due to widespread travel restrictions. Now that these are starting to lift, we’re seeing interest pour in from foreign lands and this is driving the market forward at speed.”

Lawrence Bowles, senior research analyst at Savills, said: “Although London had the lowest percentage price growth [of the UK regions], 7.5 per cent, values there rose more in pound terms than any other region: £36,469.

“It’s also the region where values rose fastest relative to people’s incomes. Our analysis compares house price rises to annual full-time earnings from ASHE in 2020. London values increased by 94 per cent of median full-time earnings. In more affordable regions, such as the North East and North West, prices grew faster in percentage terms, but rose by 63 per cent and 72 per cent of annual full-time earnings, respectively.”

Lucy Pendleton of London estate agents James Pendleton, said: “The capital has turned a corner and we expect the London market to now mount a charge and make up for lost time that saw the regions get all the fanfare over the past 18 months. ”

The biggest annual increases were in Tower Hamlets, where they shot up 20.5 per cent, Hammersmith & Fulham (15 per cent) and Camden (13.6 per cent).

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in