The latest monthly data from Rightmove show that house prices rose 0.7 per cent from August to September, or 1.2 per cent on an annual basis.
The average asking price for property now stands at £304,061, as compared to £301,973 last month.
Four areas in the country recorded annual price rises of over 4 per cent: The East Midlands (4.7 per cent), Wales (4.6 per cent), the West Midlands (4.5 per cent), and Yorkshire and Humber (4.0 per cent).
In contrast, annual falls are evident in The South East (-0.1 per cent), Greater London (-0.5 per cent), and the North East (-1.1 per cent).
However, one of the most significant figures in the report is the 6 per cent monthly rise in the number of sales agreed for properties price at £750,000 or over in London, which Rightmove puts down to buyer reaction to two years of price reductions in the area following the 50 per cent jump in prices that occurred between 2011 and 2016.
Monthly prices in Greater London also rose 1.2 per cent, the highest recorded for the month, with Yorkshire and Humber, the East Midlands and the South East all taking joint second place, at 0.7 per cent.
Rightmove director and housing market analyst Miles Shipside says: “The recovery in London’s upper end is encouraging but the painful and drawn-out process of price reductions has yet to run its course, especially in parts of Outer London and the commuter belt that saw very sizeable and unsustainable price rises.
“More sellers and agents will need to re-adjust their expectations to be in line with what buyers are willing or able to pay, as it seems that buyers are out there if the price is right.”
The Mortgage Advice Bureau head of lending Brian Murphy comments: “Renewed activity in London may possibly be a sign of first-time buyers and second steppers taking advantage of price drops over the summer, coupled with the still-competitive rates available from lenders.
“Likewise, at the upper end of the market, it seems that where significant reductions from motivated vendors have occurred, there are buyers out there willing to transact, meaning that deals are out there to be done. However, it’s important to make the distinction between an increase in activity and an increase in house prices – whilst the Rightmove data points to the first green shoots of the former in the capital, there aren’t many signs of the latter as yet.”
James Pendleton founder and director Lucy Pendleton adds: “London is thumbing its nose at the threat of a no-deal Brexit and it’s well deserved. The capital is further ahead than the rest of the country in adopting a more affordable price posture that is pulling buyers back to the table.
“If the regions are going to pull off a similar improvement, then vendors are going to have to follow the capital’s example and drive an easier bargain. Homeowners find it very difficult indeed to face up to the fact their house is worth tens of thousands of pounds less than they could have expected just six months earlier, which is why reality is something that rarely dawns quickly on vendors.”