House prices are now rising across the country but, London aside, they are not in boom territory. And with some early indications that demand is at least no longer accelerating, we expect prices to rise at around their current monthly rate for the rest of the year, ending the year up by about 8%. But London is a world unto itself, with prices in some boroughs now rising at over 20% a year. In those areas, speculative behaviour is increasingly responsible for surging prices as buyers rush in to take advantage of expected further gains. We expect prices in the capital to rise by 16% this year, taking the house price-to-earnings ratio even further above recent record highs.
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