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London house prices hit all-time high as buyers flock to make most of stamp duty holiday

The average cost of a London rose to £501,320 in January, make for a 5.3 per cent annual increase rate

London house prices hit a new all-time high in January as buyers continued to flock to take advantage of the stamp duty holiday.

The average cost of a home on the capital rose 0.1 per cent in the month to reach £501,320, an annual rate of increase of 5.3 per cent.

Prices have been rising steadily – apart from a blip in October – since the market was reopened after the first lockdown in May last year.

The market has been fuelled by Chancellor Rishi Sunak’s decision to waive stamp duty on the first £500,000 of any transaction.

The initial March 31 deadline for completed deal to qualify for the stamp duty holiday was extended to the end of June in the Budget.

Ewen Bunting, managing director of London estate agents James Pendleton said that agreed sale prices in the capital have jumped to 99.4 per cent of asking price since the Budget, up from 97.6% during the first two months of the year.

He said: “The offers we’re seeing at the moment really are electric and buyers are having to get closer to asking prices than at any point in the past five years. 

“When the stamp duty extension was confirmed, there was some concern that vendors would cause the market to seize up by refusing to share the stamp duty discount but that hasn’t transpired at all.

“Demand has been so high in London that agreed sale prices are exceeding expectations and have accelerated away from the robust valuations we saw in January and February, when buyers were already in a rush to complete before the now-superseded end of March deadline.