London house prices more than 100% higher than rest of UK

Photo © Thinglass | Dreamstime.com

Photo: © Thinglass | Dreamstime.com

Homebuyers in London are paying a premium of more than 100% to buy a home in the capital compared with the average price in the rest of the UK.

Figures for the year to March from the Office for National Statistics show that the average cost of a house in London was £498,000. The average price in the rest of the UK is less than half that at £236,000.  The cheapest place to buy a home in the UK remains Northern Ireland where the average price is £145,000.

The gap between London and the rest of the country has widened in the past 10 years.  In 2005 the price difference on the average price was 50% or about £100,000.  The figures peaked in the middle of last year with a difference of 120%. The March figures show that average prices are going up again for the first time in 6 months after slipping back from a high in the August 2014.

House price premium

The London premium is a little less pronounced for first time buyers.  The average cost of a first home in the capital is £387,000 compared to £206,000 elsewhere in the UK.

The data from the ONS covers the period before the electon campaign.  Numbers released in the coming months will reveal whether the prospect of a so-called mansion tax proposed by Labour and the Liberal Democrats had a dampening effect on the London property market.

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See also

Rents rise by 31% in 10 years