London homes outprice UK by 8.5%

London new home prices have risen 9.8% over the last 12 months compared to a UK average of 1.3%, the latest data from SmartNewHomes.com reveals.

SmartNewHomes.com said current migration out of the city could be a result of this price growth, as buyers at the mid to lower end of the property ladder are being priced out of the capital.

While the average price of a new home in many regions across the UK is down from the same time last year, by as much as 8.4% in Wales and 12% in the South West, London properties remain in high demand, resulting in strong price growth.

A new home in London will cost home buyers on average £397,583, making London the most expensive region in the UK. Buyers in the capital face prices that are up to £180,000 more than an equivalent property elsewhere in the country.

David Bexon, managing director of SmartNewHomes.com, said: "The high demand for properties in London has resulted in buyers at the top end of the market offering maximum prices, often over the asking price to secure the property they desire. Consequently, it appears that buyers further down the property ladder are being forced to sacrifice a city home and move to within commutable distances of London.

The average price buyers are willing to pay (demand price) and the average price of a new home on the market (stock price) remain close, despite the fact that demand price has fallen slightly over the last month, by 0.2%.

However, the average price buyers are willing to pay for a new home remains up 3.2% since the same time last year, while the average stock price is up just 1.3% over the same period – indicating that buyers continue to view the market with confidence.