London house prices booming

London's property prices are experiencing the effect of high city bonuses, according to the latest Land Registry figures.

14:50 11 May 2004

London's property prices are experiencing the effect of high city bonuses, according to the latest Land Registry figures.

House prices in the capital are rising by an average of nine per cent, however the traditional "banker" regions are seeing the biggest increases. Areas such as Wandsworth have experienced a 20 per cent rise, meaning that the average property there now costs 338,826.

The increases are partially a result of increasing City bonuses. However, some experts believe the threat of interest rises could force prices into decline - especially in the buy-to-let market.

Speaking to the Evening Standard, Geoff Marsh, of London Residential Research, said: "Rises in interest rates will not affect owner occupiers as much as it will buy-to-let investors. They will have a significant impact on profitability for existing landlords, and also affect how much new investors borrow."

In seven London boroughs the average house now costs more than 300,000. This is around eight times the typical salary in the region.