London property demand drives UK house prices higher

21st Oct 2013 10:29

An "unsustainable" rise in London house prices in London pushed the UK property market higher this month, according to property website Rightmove.Prices in the UK capital rose 10.2% or £50,484 to an average £544,232 in October while average prices in England and Wales climbed 2.8% to £252,418, rebounding from a 1.5% decline in September.Estate agents in inner London said soaring demand was all but wiping out local housing availability, it said.The figures are likely to fuel fears that government measures to kick start the housing market such as Help to Buy, where buyers only need a 5% deposit, will instead stoke a price bubble.Rightmove said that because London prices were already so high, phase two of the Government's Help to Buy scheme, which will extend it to existing homeowners as well as first-time buyers, is likely to bypass many buyers in the capital and mainly benefit those in other regions. Rightmove's director and housing market analyst Miles Shipside said a rebound in the number of sellers this month had brought the quarterly growth figure back into line with the recent trend at around 2% a month."Although not sustainable in the longer term, some agents currently report there is a buying frenzy in parts of prime inner London, with available stock so low that their shelves are now bare," he said.PW