London drives up house prices by Finance News Bulletin

Published: 31/03/07

News Companies & markets Investing authority portfolio Campaigns Mortgages & homesMortgage featuresInsurance Consumer recommendation Broadband & phones Retirement Saving & banking Credit & loans Small business Tax & wills communication boards Money blog Tools & calculators inquire an expert Guides contrast & buyThe London effect has pushed house price price rises to its highest level for four years

A new report says the price of a typical home jumped 08% in March, up from a rise of 07% the preceding monthA QUICK MONEY MAKEOVER If you only have one miniature to learn how to sort your finances, forget the relax and read this

>> Our 8-step planThis helped push the yearly rate of price rises to 67% - the highest year-on-year growth since June 2003 - in spite of several rises in interest rates since AugustA review from independent property research company Hometrack found the price of a typical house in England and Wales reached £173,400 in March But Richard Donnell, the solid's director of research, said: 'The caption figures continue to be distorted by a healthy London housing market

It appears largely disconnected from the rest of the country, where the impetus for cost growth is far more subdued'House costs in the capital rose by 18% in demonstration - the largest monthly increase in London since July 2002 The yearly rate of growth there reached 13

9%, Hometrack said A lack of obtainable housing combined with strong competition from buyers, destined average prices increased in more than 80% of London postcodes this monthThe strength of the housing market in the assets is having a knock-on effect on the commuter belt, the review found Average cost growth was recorded at 0

8% in both East Anglia and the South-East in March The strongest enlargement was in Berkshire, Kent, Suffolk, Buckinghamshire, Hertfordshire and SurreyThe number of house owners has fallen for the first occasion in half a century Official figures show the sum of owner-occupied homes in England dropped by 25,000 to 14

6m last day The fall breaks the pattern of rising house ownership which has risen steadily since 1953 when the amount of owner-occupiers was 32% Due to prices soaring, many potential first-time buyers have been priced out of the market - and the speed of owner-occupiers has pointed out at around 70%Away from the areas immediately influenced by the London financial system house-price inflation remained largely subdued

Growth ranged from nothing in Wales and the North to 03% in the South-WestMr Donnell said: 'This newest survey highlights a growing dilemma for policymakers senior interest rates and increased affordability pressures are clearly limiting house cost growth across large parts of the country

However, provide shortages combined with confident buyers is resultant in an acceleration in house-price growth in London'new figures from Halifax showed many homeowners earned more from their property than they took home from labor last month They said the standard house price rose by more than £3,400, while the average journal wage, which is subject to tax, was now £2,000 The rise was partly attributed to a shortage of properties on the marketplace

Experts claimed earlier this month that the possessions market has come to a close to standstill as the supply of houses hits its lowest rate for ten existence In February there were just 108,000 homes for auction in London compared with 225,000 in the same month in 2003, according to information from the Royal organization of Chartered SurveyorsInterest rates go up to control London home prices, but they also raise mortgage costs in the rest of the country As well as that, it makes it more luxurious for businesses to borrow and artificially increases the power of the pound

The result Manufacturing industry (not as important in London as elsewhere) suffers and non-Londoners' throwaway income dropsCan I ask exactly why most of the financial Policy Committee exist in London At least there should be representatives from the Scottish Parliament, NI meeting and Welsh assembly

There are noneA better solution is to lift property taxes For instance, set the amount (say £500k) a family house can reasonably cost and put in a large stamp responsibility percentage above that Solving the difficulty with interest rates is unfair to the rest of us

Especially since a lot of overseas money comes into the London housing market© 2007 Associated Northcliffe Digital Ltd Terms Privacy rule Advertise with us LoansCardsMortgagesInsuranceCompare the best deals around with This is Money

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