House prices rise again but agents warn that crash ‘now inevitable’

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Average house price in London is £552,755 . is at the highest level ever

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Ondon house prices have hit a new all-time high of £552,755 as buyers scramble to secure affordable mortgage deals before anticipating a sharp rise in interest rates.

According to the latest data from the Land Registry, the average cost of a house in the capital has increased by 8.33 per cent in the year to August.

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Agent Chesterton’s head of sales Matthew Thompson said he saw a surge in demand last month.

“London property prices are expected to see an adjustment, given the increase in buyer demand across the capital over the past month,” he said.

“Compared to August, September saw 17 per cent more buyers and 18 per cent more.

“We are also facing a growing number of home hunters who want to secure a property as quickly as possible and take out a fixed-rate mortgage.

“This has contributed to the September property market remaining busy and competitive.

“As the cost of living crisis is rising, some buyers are compromising their priorities to secure a property that is under their initial budget.”

Banks raised mortgage rates after last month’s mini-budget sparked market turmoil with a spike in the cost of borrowing from then-Chancellor Quasi Quarteng.

Despite new Chancellor Jeremy Hunt intensifying economic planning this week, rates continued to rise with the average two-year term mortgage to 6.47 percent from 4.74 percent on Monday.

Joe Garner, managing director of Newplace’s London-based property developer, said: “A home price crash is now a failed feat. Only unknown is how hard and how fast the crash is.

“Only a couple of weeks ago, I was confident that the crash would be minimal, but then Liz Truss and Quasi Quarteng split the mortgage, property and bond markets.

“Now we will be lucky if we manage to avoid a 10 per cent drop in prices. Buyers’ confidence has been shattered due to inflation returning to double digits.

Across the UK, the average home price in August was £296,000 – £36,000 more than the year before. They rose to 13.6 percent in August, slowing from 16.0 percent in July.

Average house prices rose by £316,000 in England (14.3 percent annual increase), £220,000 in Wales (14.6 percent), £195,000 (9.7 percent) in Scotland and £169,000 (9.6%) in Northern Ireland.

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