House prices recover as overseas buyers head for the capital

The 1.1 per cent uplift across England and Wales took typical prices to £162,561, in the biggest year-on-year rise seen since November 2010.

However, the annual increases were concentrated around the South, with the South West, the South East, London and the East all seeing rises, while the North, the Midlands and Wales saw falls.

The North East saw the biggest annual price drop of all, with a 3.2 per cent fall pushing average prices to £99,163.

London continued to drive the market by recording the biggest year-on-year increase, with a 5.5 per cent rise taking typical property sales to £363,802.

The English capital has attracted strong interest from overseas buyers.

The Land Registry’s latest report showed that sales of properties worth over £1m in London increased by 19 per cent in July compared with a year earlier.

Prices fell year-on-year in every month between January 2011 and April this year across the country, but they have been slowly lifting again since May.

However, house sales have been more sluggish than they were a year ago, with just over 52,300 sales a month on average between April and July this year, compared with almost 55,000 sales a month during the same period in 2011.

Experts have suggested that a lack of homes on the market is one of the main factors holding property prices up as buyers have less choice.

The Olympics and the Queen’s Diamond Jubilee celebrations have been blamed for disrupting house sales.