'Ridiculous' overseas demand sends London asking prices past half a million mark

London asking prices surged past the half a million pound milestone for the first time this month, standing at £509,870 typically.

As well as being more than double the national average, asking prices in London were 8.6% higher than a year ago.

House sellers' asking prices across the country soared to a new high, in further signs of confidence returning to the market, property website Rightmove today.

The study quoted an estate agent in London, which has had strong interest from overseas buyers, describing activity levels as "ridiculous".

A 2.1% month-on-month rise pushed average prices to £249,841 this month, with new record prices set in London, the South East and East Anglia.

This has been the strongest start to the year since 2004 in terms of asking prices, with average prices rising by 9.1% or more than £20,000 in 2013 so far, the website said.

Prices rose month-on-month in every region across England and Wales. The North saw the strongest monthly increase, with a 4.2% rise pushing typical asking prices to £152,689.

The new national peak is around £3,600 higher than a previous high recorded in June last year and the report adds to several studies which have pointed to seller confidence lifting amid signs that home buyers are finding it easier to get access to a mortgage.

In a further indication that activity is lifting, Rightmove said traffic levels to its website have risen by more than one fifth compared with a year ago, with property hunters getting through 1.25 billion pages in April, which is a record for the website.

Another property website, Zoopla, reported last week that just three in 10 house sellers whose home is currently on the market have dropped their asking prices, marking the lowest proportion recorded in three years.

The number of mortgages on the market has increased sharply and lenders have slashed their rates since a Government scheme called Funding for Lending was introduced last August.

Other initiatives called NewBuy and Help to Buy are specifically aimed at giving people with smaller deposits a helping hand.

Lenders have reported that more would-be buyers are making the jump onto the property ladder, which is expected to free up some stuck housing chains in the coming months.

Another reason for sellers' willingness and ability to stand firm on price appears to be a shortage of homes up for sale at a time when the appetite from buyers is increasing.

Rightmove said this is creating "pent-up demand", with 3% fewer properties coming to market this year than in the first five months of 2012.

Miles Shipside, director of Rightmove, said the new records were being driven by "a definite southern bias", although estate agents in most parts of the country are reporting a strengthening of demand.