London property prices are up by 9.7% for the year to July after strong demand from overseas investors.
Property price rise in London remain ahead of other regions as wealthy international investors move their money away from unstable regions such as Greece, Italy and the Middle East to buy in central London.
This is driving up prices in the surrounding regions with greater London up 8.2% for the year with average house prices at £493,748.
Rising house prices allows the equity release buyer to access cash with a lifetime mortgage and use this to consolidate debt, home and garden improvements or holidays.
Price rises vary regionally
Prices in England are now 0.9% above their January 2008 peak according to the Office of National Statistics.
In contrast for the UK as a whole house prices are 0.2% below their peak but when London is removed prices remain 4.8% lower.
Lower property values is good news for first time buyers as they would require a lower deposit or smaller mortgage to get on the property ladder.
In the South East house prices rose 2.6% for the year but for the whole country excluding London and the South East the increase was only 0.8% with the average home is valued at only £192,000.
For home movers in the South East wanting to trade up when prices are rising, their next property is more expensive which means they need a larger deposit or mortgage to buy.
High demand from overseas
Prime London property worth £2 million to £5 million is in high demand from overseas investors seeking safe havens from economic volatility.
The sharp fall in sterling to the dollar and euro in the last twelve months has made London property more affordable to cash buyers, distorting the UK market.
Prices in London are now rising faster than the rest of the country and many regions outside of London and the South East remain depressed.
The rise in prices makes it harder for London mortgage buyers to move up the property ladder when moving home if their earnings remain the same.
The most expensive homes are in Kensington and Chelsea where property prices increased by 6.5% for the year to July and average prices are £2.16 million.
Property values in London are likely to rise due to demand and benefit existing homeowners such as remortgage buyers or allowing equity release buyers to access wealth from their homes.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth to pay for care at home, gift to a family member or pay university fees for grandchildren.
Learn more by using the equity release calculator, property value tracker chart and mortgage cost calculator. Start with a free mortgage quote or call us and we can take your details.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
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