Housing market bounces back

Fears of an imminent property crash were calmed today as the latest housing figures showed prices in London rose by almost two per cent between April and June.

The average house in London now costs almost £250,000 - a year-on-year rise of almost 12 per cent, and a hefty 45 per cent increase on prices three years ago. But while the news is comforting for homeowners, it is bad news for first-time buyers.

Properties in 17 of the boroughs have now topped £250,000, the threshold for higher rates of stamp duty, giving would-be homeowners who are on a budget even less choice about where to live. " Three- bedroom houses and even some two-bedroom flats have reached the £250,000 threshold in traditionally affordable places like Waltham Forest," said a spokesman for Halifax, which published the study.

The figures show that houses in London remain the most expensive in the country, but the gap is closing.

Nat ionwide, house prices have risen by more than 21 per cent in a year to £157,251.

Rises in the capital have been lagging behind the rest of the country for three years.

And experts at Halifax Estate Agents expect annual price growth in London to fall to seven per cent by September.

Regional manager John Coupe said: " The North/South divide has been reduced to its narrowest for five years.

"The increased cost of borrowing, combined with the increasing difficulties that aspiring firsttime buyers face in getting onto the housing ladder, are expected to affect both sales and prices in London over the coming months."

The survey shows that: