London continues to fuel house price growth in February, says Land Registry

House prices in England and Wales rose 6.1% in the year to February to an average of £190,275, data showed on Wednesday.

The Land Registry said London continued to drive house price growth with a 13.5% year-on-year increase to an average of £530,368. The London borough of Hillingdon experienced the city’s biggest growth at 17.1%.

On the month, house prices rose 0.6% in the capital.

In England and Wales house prices fell 0.2% from a month ago as the number of homes sold declined amid a shortage of properties available to meet demand.

Prices in the North West rose the most last month, up 1.8%, while prices in the North East dropped 1.2%.

Across England and Wales, the number of homes sold for more than £1m rose 2% in the past year to 1,077.

“Despite a slight dampening in average property prices for February across England and Wales, London still strides ever upwards, driving the housing market,” said Rob Weaver, director of investments at property crowdfunding platform Property Partner.

“High demand, a shortage in supply and out-of-reach properties in prime central London, has seen potential buyers flocking to outer London boroughs for more affordable housing and in turn that’s pushed prices ever skyward.”

Weaver suggested there were opportunities in regeneration areas such as Thamesmead and Woolwich or in places near the new Crossrail stations.

IHS Global Insight predicts house prices will rise about 6% over 2016 amid reasonably healthy buyer interest, fuelled by expectations that interest rates won’t rise this year and a shortage of properties.

“Meanwhile, limited supply of houses has been providing support to house prices - and it will likely continue to do so despite more houses recently coming on to the market,” said Howard Archer, chief UK and European economist at IHS.

However, he warned there was a “potential major downside risk” to housing market activity and prices due to the referendum on Britain’s membership in the European Union on 23 June.

“A vote for Brexit would be liable to see a marked hit to UK economic activity over the rest of this year and in 2017 amid heightened uncertainties, which would likely weigh down heavily on the housing market.”