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Average house prices in England and Wales are rising sharply, says Land RegistryReuters

Headline house price growth in England and Wales was strong in February 2016 fuelled by an ongoing housing shortage in some areas, particularly London and the South East. Data from Land Registry shows the average price rising 6.1% over the year to £190,275. But the regional picture is much more varied, with London recording the highest rises.

The average price is falling in the North East. It dropped 3.2% in the year to February to £97,582. This is the only region to see prices fall. In Wales, the average price rose 1.2% to £122,573. In Yorkshire and The Humber, the average lifted 4.1% to £125,532.

In London, the average price jumped 13.5% to £530,368, the highest of all regions. London's supply shortage is acute because demand is so high from both domestic and foreign buyers. The city's population, currently around 8 million, is expected to hit 10 million in a few years' time but house building in London is running at half the level needed to meet demand.

High house prices and weak incomes are shutting some aspiring first-time buyers out of the market. Saving for a deposit is difficult and, despite low interest rates, it can be difficult for buyers to secure mortgages large enough for the property they want. The government has a number of schemes in place to help first-time buyers mitigate high prices, including Help to Buy and shared ownership.

Region Annual change (%) Monthly change (%) Average price
London 13.5 0.6 £530,368
South East 10.9 0.7 £267,235
East 9.8 0.7 £220,188
South West 6.7 0.7 £199,214
East Midlands 6.2 1.5 £140,977
North West 4.9 1.8 £117,081
West Midlands 4.5 -0.3 £142,734
Yorkshire & The Humber 4.1 0.9 £125,532
Wales 1.2 -0.1 £122,573
North East -3.2 -1.2 £97,582

"To the millions of ordinary families who are priced out, these sky-high house prices mean the dream of a place to call home is fast becoming nothing more than a fantasy," said Campbell Robb, chief executive of the housing charity Shelter. "Too many people are left stuck in expensive and unstable rentals, or living with their parents well into their thirties."

To dampen the risk of a credit bubble forming while interest rates are abnormally low, the Bank of England tightened mortgage lending rules. Now 85% of a lender's new mortgage lending must comprise loans worth 4.5 times or lower the borrower's income, limiting how much credit people can access.

This is particularly a problem in London, where the average property price is 179% higher than that for England and Wales as a whole. There is double-digit house price growth in 21 of the 33 London boroughs. Prices are higher in the centre of the city, meaning people are looking to buy further out where property is more affordable.

As a result of the higher demand, outer boroughs are seeing sharp increases in house prices. They are growing fastest in Hillingdon in the west, home to Heathrow Airport. The average house price in the borough rose 17.1% in the year to February 2016 to £391,728.

London borough Annual change (%) Monthly change (%) Average price
Hillingdon 17.1 1.4 391,728
Havering 16.9 1.5 361,331
Lewisham 16.3 2.1 456,937
Barking and Dagenham 16 2.1 326,461
Waltham Forest 15.7 1.1 425,358
Enfield 15.3 1.7 379,269
Newham 14.9 1.5 345,767
Croydon 14.7 1.1 370,766
Hounslow 13.6 -0.5 409,062
Bexley 13.3 1.2 323,746
Greenwich 13.1 0.3 399,466
Tower Hamlets 12.6 0.7 547,075
Haringey 12 0.2 577,018
Sutton 11.9 1.3 357,016
Harrow 11.7 1 425,111
Redbridge 11.5 2 409,629
Brent 11.2 0.4 478,285
Merton 11.2 -0.8 510,395
Hackney 10.8 0.6 682,853
Barnet 10.6 2 507,738
Bromley 10 0.3 425,325
Lambeth 9.3 0.5 598,591
Southwark 8.9 0.7 610,352
Kingston upon Thames 8.8 1.2 454,952
Richmond upon Thames 8.2 0.2 672,183
Hammersmith and Fulham 7.3 2.2 846,355
Wandsworth 7.3 0.8 622,857
Islington 7 0.8 711,077
City of Westminster 6.7 0.3 1,057,034
Ealing 6.7 0.2 494,437
Kensington and Chelsea 5.6 -0.1 1,396,753
Camden 3.6 0.2 858,067
City of London n/a n/a n/a

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