World Economy

London Property Prices Reach New Record

London Property Prices Reach New RecordLondon Property Prices Reach New Record

Asking prices for homes in London surged by £10,000 ($15,500) this month as sellers took advantage of their market dominance to squeeze more from prospective buyers, according to Bloomberg.

In its monthly report, Rightmove Plc said values increased 1.6% from September to £630,050. The number of properties coming to the market has fallen more than 16% in the past year, depriving buyers of negotiating power and limiting their choice. Prices have jumped 8.3% in the same period.

“With fewer properties coming to market, let alone the right ones at the right price, demand is still not being satisfied in many areas,” said Miles Shipside, director at Rightmove. “Demand has been dented by stretched affordability and buyers’ sense of true values after years of big price jumps, but whilst it has taken a few knocks it still remains robust.”

A shortage of homes for sale has been a dominant theme in property reports this year. Of the 32 London districts covered by Rightmove, just three have recorded price declines over the past 12 months. The biggest annual increases have been in Newham and Tower Hamlets, up 18%, while the most-expensive borough of Kensington and Chelsea—where the average price is over £2 million–has gained 4.5%.

Nationally, the picture is slightly different. While prices across the country also rose to a record last month—£296,549—the monthly advance of 0.6% was the smallest for an October in five years.

Shipside said while there are “signs of a slowing” in some sectors of the market, there’s still high demand for properties targeted at first-time buyers. Values in this category have increased almost 10% in the past year, reflecting a shortage of homes with no more than two bedrooms, coupled with interest from first-time buyers and investors.