London market boosts house prices


House prices recorded their strongest monthly jump in three years in March as market conditions continue to blossom, property analyst Hometrack has said.

The 0.3% rise was driven by a boost to London house prices, with concerns over the crisis in Cyprus and the eurozone likely to send more cash flowing into the English capital in the coming months, the study said.

The national increase in house prices this month marks the highest growth seen since March 2010. Prices soared by 0.7% month-on-month in London, showing the strongest uplift since February 2010.

Three-fifths of London postcodes saw prices increase in March and London properties now spend just under five weeks on the market before they are snapped up - the shortest average time period seen since October 2007. London has enjoyed strong demand from wealthy overseas buyers who see the capital as a "safe haven" from the troubles of the eurozone.

Richard Donnell, director of research at Hometrack, said that the latest crisis in Cyprus "will only serve to further boost the flow of international funds into the capital".

Across the rest of England and Wales, prices rose in a fifth of postcodes - the highest share in three years.

The report is the latest in a string of studies which have pointed to Government efforts to unblock the housing market having an impact. Lenders and estate agents have been reporting uplifts in activity, mortgage availability has increased sharply and loan rates have been slashed since the Government launched its Funding for Lending scheme (FLS).

House prices are likely to be bolstered further by a multibillion-pound scheme called Help to Buy, which was announced in last week's Budget and will help more people get on the property ladder or get up it with a 5% deposit.

However, the Government has been warned that the scheme must not create a "housing bubble" and push up house prices to an extent which could eventually lead to a crisis.

The Hometrack study said that the North East was the only region across England and Wales to see house prices fall month-on-month, recording a 0.1% slide. Prices were flat in the East Midlands and the North West. They increased by 0.1% in the South West, Wales, the West Midlands, Yorkshire and Humberside and rose by 0.2% in East Anglia and the South East.

Top 10 global property hotspots

Top 10 global property hotspots