London housing market rebound helping to drive U.K. gains

U.K. house prices extended their longest stretch of gains since before the financial crisis as London rebounded from a slowdown earlier in the year, according to Acadata and LSL Property Services.

The average value of a home in England and Wales rose 0.8% to 280,733 pounds (S$578,300) in November, the 17th consecutive month of increases, the groups said today. That’s the most since more than two years of gains through October 2007.

The report indicates that London’s priciest districts are regaining momentum after the Bank of England put limits on riskier mortgage lending in June and speculation about the introduction of a so-called mansion tax damped demand. The LSL data contrast with other housing reports, with the Royal Institution of Chartered Surveyors saying yesterday that London’s property market is still weakening.

From a year earlier, U.K. house prices increased 11.3% in November. Excluding London and the surrounding southeast, national values climbed 5.7%, with the gap between that measure and the overall gain the largest on record.

“These figures are spurred on by London and the southeast, where the housing recovery has been fast-tracked,” said David Newnes, a director of an LSL unit. “After a temporary hiatus at the highest tiers of the property market, growth has rallied again in the capital.”

In October, the most recent month with detailed data for the capital, London house prices advanced 1.9% on the month and 19.7% on the year. Values in the affluent borough of Kensington and Chelsea surged 5.3% on the month, while the City of Westminster saw a 4.2% increase.

U.K. housing transactions declined 20% in November from October to 70,500, the groups estimated.

Source: Bloomberg

So it all depends on who you ask and more importantly, choose to believe...

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