London house price growth fastest for four years

Annual house price growth in London rose 6.7% in March, the fastest rise since June 2003.

The survey by Hometrack suggests that higher interest rates have yet to cool house prices in London, where high demand has pushed up prices.

Fast house price growth in London has a disproportionate affect on the national average price, while recent increases in interest rates squeeze affordability in other regions, according to Hometrack. Richard Donnell, Director of Research, said: “The headline figures continue to be distorted by a robust London housing market that appears largely disconnected from the rest of the country.

“Higher interest rates and increased affordability pressures are clearly limiting house price growth across large parts of the country. However, supply shortages combined with confident buyers is resulting in an acceleration in house price growth in London.”

In an effort to calm rising house prices, the Bank of England is expected to increase interest rates to 5.5%.

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