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5 October 2007

London drives up house inflation

House prices are tailing off - outside London.
House price inflation picked up slightly in England and Wales during August, says the Land Registry.
Its latest survey of all residential property deals shows average prices rose by 0.2%, pushing up the annual inflation rate from 8.8% to 9.4%.

That means the average English or Welsh property now costs £182,914.

However the Land Registry said the recent underlying trend had been for price increases to slow down in most parts of the country except London.

"There is continuing evidence of an increasing divergence between regions, in particular the differential growth rate between London and the rest of the country," it said.

"The August data shows the current rate of increase for London house prices has increased to over seven per cent per annum greater than that of England and Wales," it added.

The national rise follows a gain of just 0.1% during July, which was the slowest increase for more than a year.


This trend has been going on for the past five months, and means that the average house in London now costs £349,838 - up 16.7% in the year - and £166,924 more than the average price in England and Wales as a whole.

The divergence was highlighted by the fact that prices actually fell during August in Eastern England, the South West, Wales, the North West and the East Midlands.

By contrast they rose by 1.5% in the capital.

In the past year, the unitary, metropolitan or county council area where prices have risen fastest has been Ceredigion in Wales, up 18.4%.

In London though, nine boroughs have seen prices rise by 20% or more, with the biggest increase taking place in Kensington and Chelsea - up 29%.

Despite the continued strong growth of prices, the volume of sales across England and Wales dropped by 15% in the year to June, as rising prices and higher mortgage costs have squeezed out some buyers.

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