London prices soar £50,000 in a year

House price inflation in UK cities hit 10% in 2015 led by London, where the average property jumped 13.3% to £52,900.

Buyers need an income of £49,700 to afford a home in a UK city, up from £45,200 a year ago.

This assumes an average mortgage of 76% LTV at three times income.

The new figures, in Hometrack’s UK Cities House Price Index, show how prices in UK cities are running ahead of wages.

Prices have been driven by a shortage of properties, reflected in a 5% drop in open market transaction values.

Oil industry city Aberdeen saw the weakest growth with average house prices falling 2%, after rising 12% in 2014.

Glasgow grew fastest with growth jumping from 1.8% last year to 8% in 2015.

The real engine for house price growth in 2016 looks set to come from regional cities.

House price-to-earnings ratios are well ahead of the long run average in London, Oxford and Cambridge.

Yet across all other cities affordability on this measure is in line with the average over the last 12 years.

While the average mortgage rate is at an all-time low of 2.6% homeowners outside the South East seem reluctant to take on debt to bid up the cost of housing, Hometrack said.

Richard Donnell, director of research at Hometrack, said: “The scarcity of homes for sale looks set to remain a feature of the market in 2016.

“This will only ease once we see greater levels of output from home builders and renewed activity amongst the 8 million existing mortgaged home owners.

“Questions over the sustainability of house price growth are being raised as house prices accelerate on growing scarcity and lower sales volumes, especially in the high growth markets such as London.”