UK house prices rebound boosted by outer boroughs

London - London property prices rebounded to an all-time high this month, boosted by areas on the periphery of the UK capital, according to Rightmove.

The average price of a home coming to market climbed to £649 772 in March, rising 1.4% from a month earlier, the property website said on Monday. Values have increased 0.9% annually, even as those in central boroughs stagnated. The best performing areas were Ealing and Harrow, while Kensington and Chelsea saw the biggest declines.

London’s housing market underperformed the rest of the country during 2016 as stretched affordability, Britain’s vote to leave the European Union and tax increases on investors weighed on demand.

“It is this trend of buyers looking further afield for value that is pushing up demand and therefore prices in many outer boroughs,” said Rightmove Director Miles Shipside. “With nine months having elapsed since the referendum and stronger demand returning to the market, there are signs that prices are becoming more resilient.”

Nationally, asking prices rose 1.3% on the month to an average £310 108, with the Midlands leading the gains. While UK prices gained 2.3% from a year earlier, that’s significantly weaker than the 7.6% pace seen in March 2016.

Even as prospects for the housing market brighten, British consumer spending is set to slow to four-year low in 2017 as inflation, weak wage growth and the impact of welfare cuts hit households, according to a separate report by the EY ITEM Club.

Real consumer spending will rise 1.7% this year, compared with a 12-year high of 3.1% in 2016, it said.

Read Fin24's top stories trending on Twitter: Fin24’s top stories