London property prices unsustainable, says building society chief

December 5, 2015 by Brendan O'Neill

House Prices

The chief executive of the Nationwide Building Society has declared that the increasing house prices in the Capital are not sustainable.

Graham Beale spoke as the building society’s profits increased by 34% during the first half of the year. However, the Nationwide has predicted that the property growth in London must slow down, or risk becoming unaffordable to borrowers. Data released by the building society indicated that the average house price was now £443,399, an increase of 10.6% on the figure for 2014. The average house price in the rest of the UK is believed to be £195,733, an increase of 3.8%.

Beale went on to discuss the impact of rising property prices in London, stating that although wages and prices increase at roughly the same rate in the UK – currently around 3% – values in London increase far more quickly, currently in the lower double digits. Beale believes that house prices in the rest of the UK will remain steady, with demand for homes much higher than the availability, encouraging house prices to remain high.

The first-half figures for Nationwide reflected an increase in lending for residential properties, with total lending for the building society reaching £14.9bn, a record amount. The Council of Mortgage Lenders released data that confirmed that borrowing was now at its highest level since 2008, by UK property owners.

So that mortgage advisers are fully equipped to handle any query from borrowers, they are required to undertake CeMAP training. London borrowers may need advice when searching for an affordable mortgage.