ONS figures show average London prices have surged past £500,000

Average London house prices rocketed 19 per cent to over £500,000 in the 12 months to July 2014, according to the Office for National Statistics.

The average property in the capital is now valued at £514,000, up from £432,000 in July 2013. Prices in the South East also experienced double-digit growth, rising 12 per cent to £337,000 from £300,000 a year earlier.

The slowest regional growth was in Yorkshire & The Humber, where prices rose 5 per cent from £166,000 to £174,000 between July 2013 and July 2014.

House price inflation in the UK as a whole picked up again in July after a slight slowdown the month before. Average house prices across the UK rose 11.7 per cent from £244,000 to £272,000 in the 12 months to July 2014. Figures for June showed 10.2 per cent annual growth, a slight dip from May’s 10.4 per cent.

On a country by country basis, prices grew 12 per cent in England, from 254,000 in July last year to £284,000 in July, while the average house price in Wales rose 7.4 per cent to £171,000 – up from £159,000 12 months previously. Scottish house prices jumped 7.6 per cent from £184,000 to £198,000 in the year to July. Northern Ireland saw 4.5 per cent growth in house prices, from £133,000 to £139,000 in the 12 months to July.

E.surv business development director Richard Sexton says: “London and the South East are stoking the housing market and firing forward house price growth.  But taking the south east corner of the country out of the equation reveals a housing market that may be warming up, but is in no way out of control. 

“Many areas of the country are only just returning to life after seven years of post-recession stagnation.  Factor in inflation too, and annual house price rises are in the region of 6 per cent – far more moderate than the headline figures imply.”