Londoners may look to rent as prices keep rising

09 2008
Despite widespread reports suggesting an imminent housing market slump, property prices in London have continued to rise in 2008, new figures show.

The latest House Price Index from Halifax reveal that, while March saw the average cost of a home in Wales and the West Midlands fall by as much as 4.7 per cent, in the capital costs went up by 1.6 per cent.

This spells further bad news for would-be buyers in the city, with greater numbers likely to turn to rental accommodation for the foreseeable future as they wait to see which way the housing market goes.

Commenting on the findings, Halifax chief economist Martin Ellis said that the housing market continues to be supported by string fundamentals.

"Sound economic fundamentals are supporting house prices. A strong labour market, low interest rates and a shortage of new houses underpin housing valuations," he explained.

"Our research shows that the labour market is the key driver of the housing market. Employment is at a record high and unemployment continues to fall," added Mr Ellis.

The average property price in the UK now stands at £191,556, the research also found. ADNFCR-1219-ID-18544119-ADNFCR

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