HOUSE price inflation in London is more than four times as high as in the rest of the UK outside the south east, according to Office for National Statistics (ONS) data released yesterday.

Prices in London rose by six per cent in the twelve months to April this year, while the UK outside of the south east and London only ticked up by 1.4 per cent, behind consumer price inflation.

Prices rises were below average or actually falling in the north of England, Scotland and Northern Ireland. Wales, however, saw a large rise of 6.2 per cent.

There was a change in the makeup of buyers, with a 4.7 per cent increase in the number of people purchasing property for the first time, after a 1.3 per cent increase in March.

The rise in April is the highest in recent years, during which the proportion of sales involving people acquiring their first house has declined.

The number of existing owners who bought a house over the year rose by 1.9 per cent.

Despite the rise in purchases by people who own no other properties, first time buyers now need an extra £8,400 to secure a property.

“Today’s inflation-busting price increases mean first-time buyers now have an even greater mountain to climb to realise their dreams of owning their home,” said Duncan Stott of the campaign group Priced Out.

In the most recent budget, chancellor George Osborne announced a scheme of mortgage guarantees, called Help to Buy. But some analysts say the policy runs the risk of inflating house prices rather than assisting buyers.

A HONG Kong hotel group is poised to make its first foray into the UK after agreeing to buy a half stake in a site on Hyde Park Corner for £132.5m

Peninsula Hotels said yesterday it will buy Derwent London’s 50 per cent interest in 1-5 Grosvenor Place, forming a new joint venture with the freeholder Grosvenor.

The pair plan to develop the 1960s Belgravia office block, which spans 1.5 acres, into a luxury hotel and residential scheme.

Derwent, which has owned the building for almost 20 years, sold half of its share and formed a joint venture with Grosvenor last year, to create a mixed-use luxury scheme.

Chief executive John Burns said Derwent decided to sell out after it became clear the building was better suited to a hotel project.

“We didn’t wish to be in the hotel business and so we took the opportunity to realise profits now,” he told City A.M.

Once the deal is completed, Derwent will have pocketed nearly £200m of proceeds from the scheme since the start of 2012. Peninsula has nine hotels in Asia and the US and is due to open its first European venture in Paris this year.

THERE’S no doubt that foreign buyers are on the hunt for property in London. Yesterday’s three deals alone – Wanda’s Nine Elms investment, Derwent’s sale of its Grosvenor Place stake to Hong Kong hotel giant Peninsula and UBS completing the sale of its Broadgate site to Malaysian investors – are worth a total of almost £900m, much of it a welcome boost for UK developers who are pouring the proceeds back into local projects. The global rush to invest and build in London – particularly from Asia and the Middle East – is a fantastic boost for the capital. Wanda’s new apartment block will bring 267 new flats (and 51 affordable homes) to the city, while Peninsula will make brilliant use of its prime Belgravia site to redevelop the current 1960s office block into a much-needed luxury hotel for business travellers and tourists.

All this planned construction is great, but there’s one bump in the road that’s stopping this investment boom from really taking off – planning permission.

An application to build the UK’s tallest residential tower in Canary Wharf was deferred earlier this week by Tower Hamlets council, concerned over the height of the building. There’s plenty of prime space up for grabs in London. Let’s not put off developers – foreign or domestic – by making life unnecessarily difficult.

LAND Securities, said yesterday it would begin the £260m development of two buildings with offices, restaurants and shops near St Paul’s Cathedral, despite not having secured any potential tenants.

Britain’s largest commercial property developer said its decision reflected its confidence in the City office market.

The 379,000 sq ft New Ludgate development occupies an island site with two distinct buildings united by a new public square.

Construction will start on the site in August with completion scheduled for April 2015.

“We believe supply of new space will be constrained in 2015,” said Colette O’Shea, head of development in London at Land Securities.

The firm is also behind the Walkie Talkie tower, which it began building speculatively in 2011. It has now secured tenants for 56 per cent of the space.

CROSSRAIL could boost residential and commercial property values in west London and beyond to Maidenhead by £1.25bn between 2012 and 2022, according to research released yesterday by property consultants GVA.

Speaking at an event hosted by Development Securities yesterday, Chris Hall of GVA said the launch of Crossrail will help spur the development of 315,000 square metres of commercial space, with areas such as Slough and Ealing Broadway seeing the biggest impact.

More than 18,000 homes and 28,000 new jobs are also expected to be created thanks to better transport links.

“Crossrail is more than a new rail link, it will be the catalyst for regeneration and a key driver in maintaining London’s position as a leading global city,” Hall said.

Crossrail chief executive Terry Morgan, who also spoke at the event, said: “Crossrail is already having an impact on property investment decisions. In west and west of London, Crossrail will have a transformative impact as a result of new journey opportunities and direct access to London’s major employment areas.”

In a previous study, GVA estimated that impact of Crossrail on property values along the entire route from Maidenhead to Abbey Wood and Shenfield could be as high as £5.5bn, with 57,000 new homes and 3.25m sq m of commercial space delivered.