London property prices jumped 10.6% in the year to the end of October, more than anywhere else in the UK, new figures show.
According to the Land Registry House Price Index, London prices rose 1.8% in October, putting the average price of a house in the capital at £503,431.
Just behind London was the South East, where prices have risen 8.3% for the year, followed by the East at 8%.
Yorkshire & The Humber saw the smallest annual price increase of 1.4%, while the North East experienced the greatest monthly price rise with a movement of 1.9%.
In this week’s Autumn Statement, Chancellor George Osborne announced a slew of new measures to help aspiring homeowners get on the property ladder.
The London Help to Buy Scheme will give Londoners with a 5% deposit the opportunity to get an interest-free loan of up to 40% on the value of their home from April 2016. Homebuyers will then need a mortgage of up to 55% to cover the rest.
Help to Buy Shared Ownership will lift the limits so that anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, will be able to buy a home through shared ownership. Current restrictions on who can buy a home through shared ownership will also be removed from April 2016.
Brian Murphy, head of lending at the Mortgage Advice Bureau, welcomed the changes.
Murphy said: “First-time buyers in the capital currently face average prices of over half a million pounds, according to October’s figures. The London Help To Buy initiative will therefore certainly come as welcome news to all those struggling in this highly competitive market. Given that average house prices in London shot up by 10.6% in 12 months, the higher 40% equity loan is clearly needed.”
Campbell Robb, shelter’s chief executive, urged the government to prioritise homes that ordinary people would be able to afford.
Robb said: “Each new rise in house prices is another blow for the millions of young people and families watching their dream of owning a home slip even further out of reach.
“It’s promising that this week George Osborne ‘chose housing’ for his spending review, but we’re very worried that the homes promised won’t be affordable for most people on low or average wages, who’ll remain trapped in expensive and unstable private renting.
“To give back hope all those bearing the brunt of the housing crisis, the Chancellor urgently needs to make sure that his new plans to get Britain building prioritise homes that people on ordinary incomes can actually afford to rent or buy.”
