HOUSE prices in London have set new records this month, according to a new survey, out today, from property website Rightmove.


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Rightmove calculate that house prices in London have shot up by 6.4% in just four weeks, making the average London house price £461,157, way above the previous £412,731 record, set at what was thought to be the height of the market in the same period in 2007. Last month, the equivalent figure was £395,560.

Given the recession, the price increase might seem bizarre, but there are reckoned to be four main causes. First is that the Rightmove survey is about asking prices and actual selling prices are thought to be substantially lower. Second is that there are fewer houses for sale.

“Some agents are virtually ‘sold out’ and are reporting available stock levels in single figures,” said Miles Shipside of Rightmove.

“In this sort of market sellers quite naturally will be tempted to test buyer appetite at a higher figure.”

The third reason is that with the banking crisis over its panic stage, Messers Broker and co. are suddenly back on the big bonus trail, a factor which has a particular impact at the upper end of the market.

“We are expecting bonuses to strengthen the London residential market,” said Yolande Barnes of Savills estate agents.

High value properties have also received a boost due to the fall in the value of the pound – this is the fourth reason for price rises – which has made London a more attractive proposition for rich foreigners than before.

Sure enough, prices in swanky areas like Kensington and Chelsea have seen the highest hikes.