19th May 2014
The price of the average property jumped by almost £10,000 between April and May, the biggest month-on-month increase ever recorded.
Numbers from property website Rightmove show that the typical cost of a house soared by some 9% over the past 12 months driving the average property price to record highs.
The website found that new sellers’ asking prices rose up by an average of 3.6%, or £9,409 during the month of May, representing the largest ever rise recorded at this time of year and another new all-time high.
As a result the price of property coming to market is now 8.9% higher than a year ago. It also marks the highest annual rate for over six years, since October 2007, when prices rocketed by 10.4%.
London is up by massive 16.3% and while the capital’s momentum is spreading, the rest of the country is only up by a more modest average of 4.9%, says Rightmove.
So far in 2014, the average asking price in London is up by nearly £80,000 or £4,500 a week – yet the national average excluding London is £1,500 a week highlighting the disparity between London and the rest of the country.
The Mortgage Market Review, introduced last month which brought in tougher affordability checks for borrowers, may help to ease the wider market, though London needs a major housing supply boost to prevent excessive rises with 10 out of 32 boroughs having annual rises of more than 20%.
The latest statistics from Rightmove come as the Governor of the Bank of England warns that the UK’s housing market has “deep, deep” problems. Mark Carney said that rising property prices are the biggest current risk to the economy. He asserted that the number of large mortgages being approved to house buyers was on the rise and that the UK was in need of new house building.