U.K. house prices increased to a four-year high in July as London’s booming property market widened its divergence with the rest of the country, Acadametrics Ltd. said.
The average cost of a home in England and Wales rose 0.2 percent from June to 225,769 pounds ($353,000), the most since June 2008, Acadametrics and LSL Property Services Plc said in a report published in London today. Prices climbed 3.2 percent from a year earlier.
“This month we report stunning growth in some London boroughs,” Peter Williams, chairman of Acadametrics, said in a statement. “The Greater London housing market is another country compared with the remainder of the U.K.” and “is likely to continue to move further out of line with all or most of the market in the rest of England and Wales.”
The figures highlight how the British capital is skewing the national picture at a time when mortgage rationing and job losses are curbing demand for homes elsewhere in Britain. The Bank of England said this week that overall house prices have remained “broadly unchanged” in the past two years and that, adjusted for inflation, they have actually declined.
London prices rose 11.8 percent in June from a year earlier, driven by gains of 38 percent in Kensington and Chelsea, 21 percent in Camden and 20 percent in Westminster, Acadametrics said. Such increases dwarfed gains of 3.6 percent for England and Wales as a whole and masked price drops recorded in the north of England, the West Midlands and the northwest.
Transactions rose 11 percent in July from the previous month, double the more usual 5 percent gain seen at this time of year, Acadametrics said.
“This may reflect the return of buyers to the market after taking part in street parties, watching television and enjoying an extra bank holiday during the queen’s Jubilee” the previous month, Williams said. “We would expect that transactions will remain weak at around the 60,000 per month level,” compared with 100,000 during the property boom of the last decade.
Acadametrics and LSL combine initial transaction data from the Land Registry and results from other price measures to produce their housing index.
Williams stressed that the Acadametrics measure differs from property indexes by mortgage lenders such as Lloyds Banking Group’s Halifax division or Nationwide Building Society because it incorporates transactions rather than loan offers, which are granted earlier in the buying process. This month’s data can therefore be compared with those of Nationwide for May, which showed a 0.3 percent monthly increase, rather than July.