House prices once again benefitted in London as demand continues to be strong for properties. According to the latest data for February, the Land Registry's House Price Index revealed that the annual average house price increased by 1.0% for England and Wales.  The increase put the average house price at £162,606 for the second month of the year. The month to month comparison between January and February offered an increase of 0.2%. As mentioned, the overall average benefitted from London’s rising house prices which in an annual comparison revealed a 6.3% increase.

In response to the report, Jonathan Harris, director of mortgage broker Anderson Harris, said, “February property prices edged higher, according to the Land Registry, offsetting more negative lending figures from the Council of Mortgage Lenders and British Bankers Association for the same month.

“However, before we get too carried away it's important to realise that the national average masks significant regional differences, with prices falling in parts of the country and London continuing to outstrip the rest. We expect this situation to continue throughout this year.

“On the lending front, the picture is increasingly positive with some of the cheapest mortgages ever seen. Lenders continue to cut rates and offer more choice at higher loan-to-values as well, which is steadily boosting the number of first-time buyers.

“There was a welcome drop in the number of repossessions in December 2012 compared with the same month a year ago but any repossession is one too many. It is also worrying that the number of repossessions in London actually rose, suggesting that the high cost of living in the capital is proving too much for some homeowners. The fact that this is happening even though interest rates are at historic lows is a real concern. It is vital that lenders continue to show forbearance towards borrowers.”