London's commuter belt leads UK house price growth

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London’s commuter belt saw the biggest jump in house prices in the opening three months of this year, new figures showed today.

Buyers took advantage of low borrowing costs and strong employment growth to plough their cash into areas such as Luton, Hertfordshire and Kent within travelling distance of the capital, lender Nationwide said.

The “outer metropolitan” region was Britain’s strongest performer in the first three months of 2016, with average prices up by 12.2% year-on-year to £344,371. London was not far behind though, with the average house price rising 11.5% to £455,984.

Across the whole of the UK, house prices last month rose at their fastest pace since February 2015, up by 5.7% to £200,251.

Buy-to-let investors rushing to avoid the additional stamp-duty rate that came into play today buoyed the market during the quarter.

It means there is a new, 3% additional stamp-duty rate on property bought as a second home or buy to let.

Robert Gardner, Nationwide’s chief economist, said factors such as constrained supply will help “keep the demand/supply balance tilted in favour of sellers and maintain pressure on price growth in the quarters ahead”.

But conditions in the south were not replicated in the north with the gap between the two regions widening last quarter. The average house in the North now costs £150,917 compared with £313,670 in the South.

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April 2, 2016 |
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