London House Prices Hit £500,000 Average

The average cost of a property in London rose above £500,000 for the first time in October.

Land Registry figures showed that the cost of homes in England and Wales rose by 5.6% in the year to October, up 0.4% from the previous month.

London saw the biggest rise in the last 12 months, with the average property value up 10.6% and the average cost of a home in the capital at £503,431.

At the other end of the scale, Yorkshire and the Humber saw an increase of 1.4%.

The official statistics were revealed hours after Nationwide released its own market study, which takes in the current month of November.

It (Other OTC: ITGL - news) pointed to a slowdown in UK price growth, with its annual rate standing at 3.7%.

Nationwide’s chief economist, Robert Gardner, said: "While this bodes well for a sustainable increase in housing market activity in the period ahead, much will depend on whether building activity can keep pace with increasing demand.

In the Autumn Statement and Spending Review announced by the Chancellor this week, George Osborne confirmed the Government's ambition to build 400,000 affordable homes to tackle a " crisis in home ownership ."

While prices have been on the increase, the number of properties being sold is, in fact, declining.

In the year to August 2015, the number of completed house purchases decreased by 15% in England and Wales.

It was not only low-earners affected, as sales of homes worth more than £1m went down by 13% over the year.

There have been new fears of a boom in property prices in the coming months after the Chancellor’s Spending Review, which also resulted in a 3% rise in stamp duty for buy-to-let investors and those wanting second homes from April (LSE: 0N69.L - news) 2016.

Property analysts have warned that this could lead to prospective landlords rushing to buy before the rise is introduced - pushing more people away from the market.

There have also been concerns that the rise could mean future landlords will pass on the cost to their tenants, meaning renters would be penalised.