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London asking prices at new high
The website put much of the increase down to a 'frenzy' of activity in parts of London as overseas investors look for a safe haven for their cash
A major property website has seen London house sellers' asking prices soar to a new high this month, beating their previous record by nearly £30,000 and fuelling fears that the capital is overheating.
Asking prices in London saw an "unsustainable" 10% month-on-month increase in October, pushing typical asking prices in the capital to £544,232, leapfrogging a previous high set in July by more than £28,000.
The website put much of the increase down to a "frenzy" of activity in parts of prime inner London as overseas investors look for a safe haven to place their cash, which is "leaving the shelves bare".
Across England and Wales, asking prices rose more gently by 2.8% month-on-month, following two months of falls, to reach £252,418 on average.
Prices across the country are 3.8% higher than they were a year ago, although in London they have shot up by 13.8% over this period, Rightmove said.
Despite the overall upward march in prices, Rightmove said that "a bubble seems a long way off in the majority of regions".
The patchy state of the housing market was still shown, as four areas recorded year-on-year falls in house values - Wales, the North, the North West and the West Midlands.
The North recorded the biggest year-on-year drop, with asking prices falling by 2.2% to reach £145,094 on average. Sellers in Wales have dropped their asking prices by the second biggest amount over the last year, with prices falling by 1.4% annually to typically reach £165,708.
After London, the East Midlands saw the second biggest annual increase in house prices, with a 6.0% annual uplift taking them to £171,913 on average.
The findings come after the Council of Mortgage Lenders (CML) reported last week that lending activity is at its strongest in five years and the Office for National Statistics (ONS) said that UK house prices reached an all-time high of £247,000 in August, surpassing a previous 2008 peak.
Housing market activity among people with low deposits who have previously struggled to get on the property ladder is expected to increase further in the coming months, as a new phase of the Government's flagship Help to Buy scheme is fully fired into action.
Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland started offering state-backed loans to people with deposits as low as 5% under the scheme this month and the lenders have reported strong interest so far.
Lenders including HSBC, Santander and Barclays have also confirmed they plan to come on board and start offering loans under the scheme.
The City of Westminster was named by Rightmove as London's strongest-performing house price area in October. Prices there have soared by 11.9% month-on-month to reach £1.6 million typically. Kensington and Chelsea and Hammersmith and Fulham also recorded increases of 11.8% in sellers' asking prices over the month.
Sellers are now typically asking £2.4 million for a home in Kensington and Chelsea and £1.1 million for a home in Hammersmith and Fulham.
Rightmove said that wealthy overseas buyers are continuing to snap up properties in prime central London as they are seen as "safe" investments amid the troubles of the eurozone.
Rightmove director Miles Shipside said that while this is happening and developers can achieve sales at premium prices, this "eats up a much-needed source of fresh supply and drags up existing property prices at an even faster rate".
He said: "Although not sustainable in the longer term, some agents currently report there is a buying frenzy in parts of prime inner London, with available stock so low that their shelves are now bare."