Agency predicts 10% price falls for London's £1m+ homes

UK house prices increase 10.5 per cent annually to an average of £224,242 - a price fuelled by the number of new properties for sale being down 10.1 per cent on a year ago. 

The data comes from estate agency chain Haart which says that despite a drop in demand for homes over the past month, demand overall is still 6.4 per cent up on a year ago.

Haart says the current UK average price is the highest price since April 2012 and a continuation of the strong positive growth in prices the agency has seen over the past year, largely as a result of the growing divergence between supply and demand. 

“The government must take drastic action to encourage the release of homes suitable for families and prevent record high price rises in 2016 for the core of the UK property market. The new Help to Buy ISA available from next week should help first-time buyers save for their deposit but it is stimulating demand without addressing the underlying issue of lack of supply” says Haart chief executive Paul Smith.

“While house prices in the rest of the UK are likely to continue their current trajectory in 2016, the top end of the market, particularly in London, will see a price correction because of the impact of stamp duty - likely to consist of a 10 per cent drop in value for homes currently priced over £1m” he says.

The Haart data suggests London house prices increased 1.5 per cent in the past month and 4.2 per cent over the year to reach a current average of £510,925