London House Prices Rise 32% in 2006

London

According to estate agent Knight Frank, London House prices, in certain areas like Mayfair, rose by a record 32% last year. A significant reason for this, continued London House price boom, is the generous bonuses given to city workers. Another reason is the inflow of money from abroad; foreign investors are buying houses in London. In particular demand is rising from Russian and Arab investors. It is not just the likes of Roman Ambrovavich who have countless millions to spend.

Despite the rising demand, supply is still limited. Houses are being sold very quickly after being put on the market. There has been an increase in gazumping and sealed bid - features not seen since the late 1980s boom.

The effect of these 2 groups is that house prices are rising, even though many houses in London are beyond the reach of ordinary workers, such as nurses and teachers.

The average price of a house in London is now £322,108

House prices in the rest of the country continue to boom.

(1) House Prices London