House prices in London were a massive 10.6% higher in October than a year earlier, according to the latest house price index, released today by the Land Registry.

This annual increase is significantly higher than any other region, and almost double the national average of 5.6%.

The average price of property in the capital is now an eye-watering £503,431, in comparison with the average for England and Wales of £186,350.

Property earns more than its owners

Property values in the capital have risen by 1.8% in the last month alone, according to the Land Registry. Some industry experts have pointed out that this means London homes probably earn more than most of the homeowners living inside them.

Jonathan Hopper, managing director of buying agent, Garrington Property Finders, explained: “London property is once again making money faster than most of its inhabitants can earn it.

“With the average home in the capital jumping in value by more than £3,400 in a month, it’s no wonder salaries can’t keep up.”

Sales slump

It’s not all good news though, with the number of sales in the capital having reduced significantly, particularly in the high-net-worth bracket.

The number of properties sold in London for over £1m in August 2015 decreased by 14% to 788 from 911 in August 2014.

Hopper said: “Transactions in London are down by a fifth in a year, and squeezed supply has sent annual price growth rocketing back into double digits.

“The drop in sales is particularly acute in the £1.5m to £2m price bracket that was hit so hard by last year’s rise in Stamp Duty – transactions are down by more than a third as buyers balk at the likely tax bill and would-be sellers hold off.”