House prices increased by 0.7% in September, with signs confidence is returning to the London market, according to property website Rightmove.
This monthly rise of over £2,000 took the average house price to £304,061, up 1.2% from a year ago, but some parts of Britain are recording average annual price rises of at least 4%.
Substantial price reductions in some parts of London over the last two years are now helping to improve sentiment and momentum, Rightmove says.
There are signs of renewed buyer activity in London, particularly at the upper end, with a 6% rise in number of sales agreed for homes at £750,000 and over compared to the same month last year.
Average asking prices in Inner London peaked in February 2016 at £823,000, and are now £756,000.
Lucy Pendleton, director of independent estate agents James Pendleton, says: “London is thumbing its nose at the threat of a no-deal Brexit and it’s well deserved. The capital is further ahead than the rest of the country in adopting a more affordable price posture that is pulling buyers back to the table.”
She points out that homes above £750,000 are not that costly for the capital.
She adds: “Despite being well above the national average, they are nowhere near what would be considered London prime. A bounce in agreed sales in this bracket is a significantly positive sign for the London market — less doom and gloom, more doom and boom — but cheap borrowing is still playing its part.”
While the annual rise remains muted at 1.2%, some areas with better affordability and sentiment saw considerably higher rises. Wales, East Midlands, West Midlands and Yorkshire & the Humber all recorded average annual price rises of at least 4%.
Mark Readings, founder and managing director of online estate agency House Network, says: "Although a clear divide between regions remains, the overall picture in the UK is encouraging and positive, as the high-employment rate and government first-time buyer incentives help steer the market upwards."
‘Back to school’ season
Rightmove says choice for buyers has been boosted with the start of the ‘Back to school’ season, which has seen a 16% jump in new properties coming to market.
Miles Shipside, Rightmove director and housing market analyst, says: “The start of the ‘back to school’ season sees a surge of sellers coming to market compared to the preceding quieter holiday period.
“Sellers aren’t hanging back in coming forward to try and sell, and with average prices just 1.2% higher than a year ago, many seem to be pricing sensibly.”