London home prices keep rising on strong demand

London

FIRST-TIME home buyers in London are getting more and more squeezed out of the market as prices soar while demand shows no sign of abating, according to a survey by Rightmove Plc. Asking prices for homes with no more than two bedrooms, typically targeted by those looking to get on the property ladder, surged 1.1 per cent in July to an average £449,766 (S$960,500), Rightmove said on Monday. Across all homes in the capital, the average increase was 0.2 per cent.

An imbalance between supply and demand, along with record-low borrowing costs, is keeping upward pressure on house prices across the UK. An index by the Royal Institution of Chartered Surveyors last month showed the housing shortage is at its worst level in almost four decades. "Stretched affordability is acute in nearly all market sectors in London, but the lower-end sector with up to two bedrooms has high demand from first-time buyers, down-sizers and investors," said Rightmove director Miles Shipside.