House prices: London's outer areas continue to see biggest growth as priced-out buyers head east

House prices in London's cheaper outer boroughs are consistently outperforming the more expensive central districts as stretched buyers continue to move further out in search of good-value homes.

The average asking price of a London home has risen by almost £27,000 in a month as home owners in central parts of the capital continue to avoid listing their properties for sale amid uncertain market conditions.

The data released by Rightmove today shows although average asking prices have reached £627,591, homes are actually marginally cheaper than this time last year.

Demand from first-time buyers for starter homes in the cheapest areas on the capital's outer fringes is continuing to push up prices in the east London boroughs of Bexley, Barking and Dagenham, Havering and Redbridge.

SO WHERE ARE HOMES SELLING THE FASTEST?

Homes in the hip, much-loved district of Walthamstow in east London are selling at a faster pace than anywhere else in the capital, with sellers accepting offers within just 26 days of properties being listed for sale.

Home owners in Eltham, Leyton, Romford and Bow also need to be prepared to move on quickly as eager buyers rush to seal a deal in less than a month.

In contrast, the average 'time to sell' in Greater London has edged up by three weeks over the past six months to 83 days, as sales of homes at the top end of the market continue to stall.

"The lack of new listings in the typically pricier more central locations indicates that some would-be sellers are holding back. Cash-rich owners are showing that they are able to sit tight instead of coming to market now, and await their hoped-for price recovery," says Miles Shipside, Rightmove director and housing market analyst.

THE OUTLOOK FOR FIRST-TIME BUYERS

Almost half of all the homes sold in London last year went to first-time buyers — the highest proportion since 2001.

Asking prices in this sector of the market have also dropped slightly year-on-year to £489,500. Yet prices are continuing to rise faster than wages, so buyers across the capital are struggling with affordability.

With homes taking longer to sell across London, first-time buyers may now find themselves in a position to haggle if sellers are keen to move on relatively quickly.

"It is wise for sellers to be cautious and not to over price given stretched buyer affordability," says Shipside.