London house prices are surging, say estate agents

London house prices are surging, say estate agents

	Published : Fri, 17 Feb 2006 17:05 By : Andrew Stead Print this Story

LONDON: House prices in London are climbing up, according to two different surveys by estate agents.

The average price grew by 2 per cent in January to 238,305 pounds from 233,317 in December, said Haart. Price of prime London properties have gone up 1.5 per cent, according to Knight Frank, which said this is the strongest monthly growth.

The housing market in the capital is being boosted by factors like shortage of good quality homes on sale, record bonuses by City firms and a renewed consumer confidence.

Haart has reported a 10 per cent increase in the number of buyers in the market, which it said has reduced the time it takes to sell a property to five days from 20 days. The increased prices are not deterring first-time buyers even, said Haart. As much as 24 per cent of all buyers in the market are first-time buyers, it said, which is a 1 per cent increase.

Paul Smith, chief executive of Haart, said the rise in activity levels, more pertinently first-time buyer levels, reflects a marked increase in confidence. He expects house prices in London to rise by 5 per cent in the first half of the year.

Knight Frank said the annual growth rate for prime London property – penthouses and apartments worth over 1.5 million pounds and houses worth over 3 million pounds -- has reached 9.8 per cent, the strongest growth since 2002.

Knight Frank's head of residential research Liam Bailey said bonus money continues to filter into prime London with traditional areas such as Kensington and Chelsea experiencing increased enquiries and transactions. Areas in and around the Docklands are also experiencing high demand.

Bailey expects the prices to rise further before the market slows in the second half of the year. He predicts an increase of around 7 per cent for the whole of 2006, which is about three times the national average.

Property website propertyfinder.com too has come out with data showing there is increase in house buying activity at the national level. It said the number of people searching for property on the site hit 1.1 million in January, up 54 per cent compared to the same period in 2005. It said since August 2005, when the Bank of England reduced the base rate by 0.25 per cent, the number of househunters has risen 30 per cent.

Meanwhile, official figures indicated that house building activity in the country continued to increase in the last quarter of 2005. There were 42,800 housing starts, up 4 per cent from the same period a year earlier, and 47.300 completions, up 11 per cent, according to data released by the Office of the Deputy Prime Minister.

Over the 12 months to the end of December starts numbered 177,200, unchanged on the year-earlier period, and completions totalled 159,700, up 4 per cent.

The ODPM said increased activity was particularly visible in the South East, West Midlands and East Midlands, which took care of a fall in London.