The average price of property in London has increased by 19% and England and Wales increasing by over 9% in the last year.

A report produced by Acadata and estate agents LSL Property Services shows house prices are up strongly in London with Lambeth leading with a rise of 38.5% and Wandsworth and Waltham Forest up over 25% in the year.

On property prices in England and Wales are up by 9.9% with average prices now at £270,636. In contrast the average property price in Kensington and Chelsea is now at £1.99 million.

If London and the South East is removed from the data the rise in England and Wales reduces to 4.9%.

Signs of a London slowdown

Data from the Royal Institution of Chartered Surveyors (Rics) show the market stumbling in July with a drop in sales and enquiries from buyers at the fastest rate since April 2008 suggesting the market is cooling.

The number of sales agreed have also reduced from 19 per surveyor to 16 in June and are now less than the level of 17.6 per surveyor attained in July 2013 before the launch of the Help to Buy scheme which helps first time buyers and home movers.

The Help to Buy scheme allows first time buyers with a small deposit of only 5% to buy a property with the government either providing a further 20% as an interest free equity loan or mortgage guarantee where the government guarantees 15% of the property value to the mortgage lender.

Market confidence and activity increased significantly after the scheme was introduced with more buyers and lenders increased the range of mortgages available requiring 10% deposit, or 90% loan to value.

A further Rics survey shows the number of mortgages approved for homebuyers is 1.4% lower in July at 66,279 compared to 112,291 in July 2007.

Buyers with deposits of 15% or less have increased year on year by about 50% to 11,533 and now represent 18% of all mortgage approvals including first time buyers, home movers, remortgage buyers and buy-to-let landlords.

Home movers wanting to trade up when prices are rising will find their next property is more expensive which means they need a larger deposit or mortgage.

Family members can help home movers where equity release buyers access money using a lifetime mortgage and gift the extra deposit to buy their second home.

Other UK areas still buoyant

There were over 90,000 properties sold in England and Wales in July according to Acadata and estate agents LSL Property Services.

Outside of London there are areas experiencing house price rise with 19% to 20% rise in Brighton, Hove and Poole. Other areas saw increases of greater than 10% such as Bristol, Bournemouth and Luton.

The rise in house prices continues to increase the difficulty for first time buyers and home movers to secure their purchase based on affordability requirements from lenders.

However, some areas have decreased such as Cornwall with prices of the average home lower by 1.8% or the largest fall in Merthyr Tydfil down 7.3% year on year.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to pay for care at home or buy a more expensive home.

Learn more by using the mortgage cost calculators, equity release calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

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