London house prices up 5pc, official figures show Economists said the prospects for the property market remained tough for 2013 with unemployment remaining stubbornly high and with limited growth in wages expected. But central bank attempts to cut mortgage rates could help prop up demand. Howard Archer, economist at IHS Global Insight, said: "Some support for house prices should come from recent decent employment growth and likely extended low interest rates, while mortgages appear to be becoming increasingly available helped by the "Funding for Lending" scheme launched at the start of August by the Bank of England." A sharp increase in foreign buyers has been cited for the continuing health of London's property market. This was initially due to the global super-rich seeking protection from global financial uncertainty and tax rises - agents are reporting an influx of French buyers - but more recently agents suggest middle class Chinese buyers with children coming to study in London have been buying property. It emerged yesterday that investors have rushed in to reserve luxury homes planned for the revamped Battersea Power Station in south-west London, with 600 of the 800 properties already claimed after just five days on the market. River-facing penthouses carry an asking price of more than £6m. The ONS figures have a two-month between when data is gathered and published. A monthly report by Nationwide building society has since suggested average prices dropped by 1pc for the full year in 2012. Economists today were more focused on a monthly report by the Royal Institution of Chartered Surveyors (RICS) which is based on more recent data. 12-month house price changes. Source: ONS It showed its most positive reading since 2010 with the organisation suggesting the market may be "over the very worst" . A balance of 24pc more surveyors predicted that the number of house sales will increase over the next three months, compared to those expecting transactions to fall. The poll of 280 surveyors also showed that property prices held steady in December, marking the first time since mid-2010 that surveyors did not report that prices edged downwards over the previous three months. Accordingly, the survey showed that for the first time in two and a half years surveyors did not predict further property price drops over the coming three months. "This more positive outlook comes at a time when confidence has been growing that the market in some parts of the country may now be over the very worst," said RICS.