London property prices jump by almost 20 per cent, official statistics show

 
Property price jump: Average house prices in London are up by almost 20 per cent

Average house prices in London have surged to within a whisker of breaking the half million pound barrier for the first time, latest official figures show.

They rose by 19.3 per cent to £499,000 - more than 11 times the average full-time London salary of £43,866 - in the year to June, according to the Office for National Statistics.

Despite the sharp rise, there are some signs of the widely anticipated cooling in the market as the rate of increase is down from the 20.1 per cent peak recorded in May. The ONS data tend to lag actual agreed deals by several months. More up to date figures yesterday from the property website Rightmove showed asking prices slumping nearly 6 per cent in August.

Fears about interest rate rises, tougher mortgage approval rules and a strengthening pound that has made London more expensive for foreign buyers are all thought to have taken some of the heat out of the capital’s propperty market.

According to the ONS average price of a newly built home - the section of the market most dominated by foreign buyers - actually fell slightly in June from £408,000 to £398,000.

However, there was little sign of relief for first time buyers with average prices for debut home owners rising from £388,000 to £393,000.

Campbell Robb, chief executive of the housing charity Shelter, said: “Today’s house price hike is yet another blow for people across LOndon desperate to put down roots and create a stable home.

“No matter how hard people work or save, millions are being priced out of a home of their own, caught in the ‘rent trap’ and constantly moving from one expensive property to the next.

“The only solution is for politicians to roll up their sleeves and build the affordable homes we so desperately need. From a new generation of part rent part buy homes, to encouraging smaller builders back into the market, there are ways to fix this country’s housing crisis.”

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