London property price gap widens

The gulf between London house prices and the rest of the country is widening, according to the latest data from Land Registry.

Figures for May showed London property prices rising at an annual rate of 18.5 per cent, compared to 6.7 per cent across England and Wales.

The price surge in the capital compares with a 0.9 per cent annual rise in the northeast and a 1.3 per cent uplift in the northwest. Prices in the southeast rose annually by 8.4 per cent.

The average price of a London property is £439,719, against £172,035 for England and Wales.

Separately, Rightmove, the property website, found that many people were paying under the asking price, including in the capital. Some 72 per cent of buyers in England and Wales paid under the asking price in the past year, it found, with 53 per cent doing so in London.

Miles Shipside, Rightmove director, said the results suggested talk of a national housing bubble was unfounded. “Although prices are rising, most people continue to make offers in line with what they can afford or what they perceive to be the right value.”

The Land Registry data follows moves on Thursday by the Bank of England to limit the risk of a housing market bubble by introducing a cap on mortgage lending and a new affordability test.