London 'Fuelling house price boom'

London is continuing to drive up average house prices in England and Wales despite evidence of a slow down elsewhere in the country, figures showed today. Property website Hometrack said prices rose during July by 0.6% for the fourth successive month, raising the average price of a house in England and Wales to £166,500. But the group pointed out the increase had been powered by prices in London, while the cost of property remained largely unchanged in 70% of the country. The capital's market continues to rocket with the average house price up 1% inJuly to £280,000. Elsewhere there was 0% growth in the East Midlands with property averaging £122,500 and a 0.1% rise in Yorkshire and Humberside sending prices to £125,100.

Richard Donnell, director of research at Hometrack, said: 'While the strength of the market in London continues to flatter headline results, there is clear evidence levels of house price growth and market activity are starting to slow. 'Mr Donnell said the dominant London performance was driven by demand continuing to outstrip supply with homes taking just 3.8 weeks to sell compared to 8.2 weeks in the North West. Londoners were also managing to get 96% of their asking price, whereas in Wales sellers were having to cut their losses to get 93%.

The divide between London and the rest of the country was pulled into focus by a study of postcode areas, which revealed price rises in just 31% of England and Wales last month, compared with 42% in June. Mr Donnell said: 'The survey shows there is strong market activity - such as in London - but in reality across two thirds of the country house prices remain unchanged.