Average £500,000 House Price Coming Soon to London

If agents in London have witnessed big price rises so far, they’ve seen nothing yet according to consultancy PwC – the £500,000 average home will be here by Christmas.

PwC has extrapolated data released earlier this week by the Office for National Statistics which shows that average house prices in the UK grew by 9.1 per cent between February 2013 and February 2014.

In London the growth rates were almost double that level – growing by 17.7 per cent in the same period.

Now the consultancy says by the end of 2014 the average property in the UK could be worth around £270,000 and in London it will be an eye-watering £510,000.

The good news for prices outside of London is that PwC thinks such increases are sustainable. This is because the rises are in line with a normal cyclical recovery after a period of subdued housing markety activity. Other recent data such as increases in house building backs up the consultancy’s finding.

But PwC senior economist William Zimmern warns that the London picture is more mixed.

“Concerns of overheating in London may grow if house price to earnings ratios and mortgage repayments as a portion of income continue to rise rapidly and diverge from the rest of the UK.”