Average London house price passes £500,000 as UK property prices continue to climb

House prices in London went up by nearly 10% year-on-year in November 2020 with the average home costing upwards of £500,000 ($684,373), the government’s UK house price index revealed.

London experienced the highest month-on-month price hike in England, with November prices going up by 4% when compared to a month earlier.

Yorkshire and the Humber, where the average home cost £180,856 in November, also saw an annual increase of 9.7%, rivalling London.

The Office for National Statistics noted that two London boroughs had annual house price growth above 20%: Kensington and Chelsea, at 28.6% and the Outer London borough of Brent, which had annual price growth of 23.9%.

The lowest annual growth was in the East of England, where prices increased by 4.8% in the year to November 2020, up from 4.3% in the year to October 2020.

Overall, UK house prices increased by 7.6% in the year to November 2020, up from 5.9% in October 2020.

The annual price rise of 7.6% takes the average property value to £266,742.

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For the first time, the average home in the UK is now worth a quarter of a million pounds and in London it’s double that, noted Jonathan Hopper, CEO of Garrington Property Finders

“But most striking of all is that headline figure on the speedometer. Average house prices are now accelerating faster than at any time since the eve of the Brexit referendum,” he said.

Ross Counsell, chartered surveyor and director at estate agent Good Move, said this can be explained by “the influx of people looking to buy property in 2020, both before the end of the stamp duty holiday in March, and due to many people simply looking for more spacious properties, particularly in rural locations, during lockdown.”

“Mortgage approvals too are at an all-time 13 year high, and with such high demand for properties and mortgages, naturally comes higher average house prices,” he added.

However, he said he expects house prices to fall after the end of the stamp duty holiday.

Meanwhile Iain McKenzie, CEO of The Guild of Property Professionals, said looking to 2021, “the mass vaccination roll-out should bolster sentiment in spite of all the economic uncertainty and may prevent the fall in values many were expecting."

Earlier this week it was reported that property prices are falling as buyers surge to find more homes amid the COVID-19 pandemic, despite slim chances of beating the stamp duty holiday cutoff date.

According to data from property portal Rightmove (RMV.L), the number of sales agreed is up by 9% so far year-on-year in January.

Many sellers may still be hoping to find a buyer and complete the sale before the stamp duty holiday comes to an end on 31 March — though the odds are stacked against them, Rightmove noted.

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