House prices up 13.3% as “100 families compete for as few as 4 homes” in north London

House prices in London have continued to surge with new figures showing a jump of 13.3 per cent in the year to December 2014, mirroring a rise of 9.8 per cent across England and Wales where the average asking price for a new home rose to £272,000.

While the figures released by the Office for National Statistics showed prices racing ahead in the capital throughout last year to the current average asking price of £582,438,it seems there was also a slight cooling off towards the end of 2014 with a slowdown of 1.1 per cent between the months of November and December.

Mark Wayne, Director of Wayne and Silver estate agents based in Heath Street, Hampstead said: “The reason we’re still seeing such high growth in prices is because there’s still very little supply for such high levels of demand. In Hampstead, St John’s Wood and Maida Vale, houses under a million pounds are flying and we have seen over 100 families compete for sometimes as few as 4 homes.”

However, whilst asking prices have continued to see significant inflation, Mr Wayne warned that the eventual sale price of homes after negotiation can often be “substantially lower”. He also explained a reported slowdown in sales of properties above one and two million pounds in the area could be due to caution from high-end buyers ahead of the general election in May and the prospect of a rise in stamp duty and the ‘mansion tax’ policy.

The cost of a home in the capital has also continued to climb for first time buyers, with the average two-bedroom starter property hitting a record high of £431,159 in February according to online estate agents Rightmove. The cost of an average starter property in Camden rose 5.2 per cent to £1,019,586 this month while neighbouring Haringey bucked the buoyant trend by recording a drop of 7.7 per cent to £560,981 between January and February this year.

The tail off in price rises towards the end of last year was also reflected in Greater London being the only region to register an overall slump in sales of flats sold in the last three months of 2014 compared to the previous year.

London residents also saw the largest fall in sales of flates and terraced properties, while the South East Region recorded the steepest drop in sales of semi-detached and detached properties in the country.