Asking prices rose in all but one London boroughs this month, hitting an average of £667,000 at the highest rate of growth in the six years since the Brexit vote.
The capital saw the biggest jump in home buyers of any UK region as the average price tag rose 7.3 per cent on a year ago according to Rightmove’s monthly house price data.
The end of pandemic restrictions and reopening of offices are luring buyers back to London after two years of dwindling interest, leading to price rises following a Christmas lull.
Rightmove’s Tim Bannister said: “As the final legal restrictions look to be ending soon, and more businesses are encouraging a return to the office for at least part of the week, we now have a group of movers who are looking to return closer to major cities, or at least within comfortable commuting distance of their workplaces.
“High demand and a shortage of available stock are supporting a rise in prices and a new record average asking price this month.”
London’s top and bottom boroughs
Outer London boroughs saw the highest price rises as the race for space continued, with homes in Bromley seeing the biggest annual price increase in the capital at 11.5 per cent to £610,500.
Asking prices in Barking & Dagenham were up by 10.8 per cent to £362,000; in Havering they rose 9.9 per cent to £458,000 and in Merton they were up 9.7 per cent to £683,000.
However, the third highest price rise was in the capital’s most expensive borough, Kensington & Chelsea, where asking prices rose 10.6 per cent to £1.68 million.
High net worth international buyers, who favour established prime London neighbourhoods, have returned to the London property market in the past few months fuelling demand for large multi-million pound houses in the borough.
The only borough where asking prices fell year-on-year was Hackney, which saw a 0.9 per cent price drop to £653,000. Prices in the east London borough had seen an astonishing 568 per cent price rise in the 20 years to 2018, leading many to believe property in the borough may have peaked.
Prices in neighbouring Haringey were flat, remaining at £626,000, while in Tower Hamlets, to the south of Hackney they rose just 0.6 per cent to £569,000.
House prices in the UK up £40,000 since start of pandemic
Nationally, asking prices hit a new record high of £349,000, up 9.5 per cent on a year ago, the highest rate of growth since September 2014. Meanwhile £7,785 was added to the average asking price in just one month.
Rightmove said this price rise means average asking prices have increased £40,000 since the start of the pandemic, compared to £9,000 in the previous two years.
While buyers continue to outnumber sellers, keeping asking prices high, Rightmove said that the number of new sellers listing their homes had risen by 11 per cent compared to last year, meaning there’s a wider choice of stock available.
“It seems that the fast-moving market has really hit home for sellers this month, with a number of those who are also buyers putting themselves in the best position to secure their dream home by becoming a ‘power buyer’ and getting their own home on the market first,” said Mr Bannister.
“This in turn is driving a rise in new listings compared to last year, giving the existing pool of buyers some fresh choice.
“A fear of missing out on one’s dream home is really driving market behaviour at the moment, as movers look to do all that they can to avoid the disappointment of being too slow to secure their ideal property.”