Where are house prices rising by more than 10%?
It’s easy to become convinced that house price growth is slow (or even falling) in the UK. The media continue to post negative headlines whenever they can. But research released by LSL/Acadata last week shows how foolhardy it can be to rely on headlines and the ‘big picture’ news stories. National price data is skewed by central London price movement. On the ground, 80% of the UK’s unitary authorities saw house prices rise over the last year – and some by as much as 16%.
London property prices are still rising
Over the last year, London property prices have posted an average gain of 0.7%. The average price in London is now £591,459. The average increase would have been higher, were it not for the effect of falls at the high end of the property market. Indeed, much of the slowdown in the growth of property prices in London can be attributed to just three boroughs – Kensington and Chelsea, the City of Westminster, and Wandsworth. All three of these boroughs are among the top ten most expensive.
Look elsewhere in London, and the picture is much different. In the cheapest third of London’s boroughs, only two have seen average house prices fall. Other boroughs have witnessed new peaks in their property prices, such as Croydon (up by 5.4% over the last year) and Lewisham (up by 6.7%). In all, 20 out of 33 London boroughs experienced a rise in house prices over the last year.
Regional prices are catching up with London
With London prices included, the national average house price is now £297,298, compared with £291,416 in August 2016. That’s a rise of 2.1%. However, LSI/Acadata analysis shows that:
- Excluding London, the UK’s average house price is £255,804 – up 2.8% over the last year
- Excluding London and the South East, the UK’s average house price is £227,238 – up 3.4% over the last year
Regional prices are starting to catch up with London’s price rise over the last eight years, and some of the price increases have been no less than stunning.
Of the 106 unitary authorities in England and Wales (including London), 86 have seen their average house prices rise. The star regional performer has been the East of England where house prices are, for example:
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- 11% higher in Southend-on-Sea
- 2% higher in Luton
- 1% higher in Bedfordshire
- 6% higher in Peterborough
But huge price rises haven’t been confined to the commuter belt in the East of England. Other authorities that have seen prices roaring include Poole (up 12.9%), Pembrokeshire (up 10.35%), Blaenau Gwent (up 12.85%), and the largest riser of all, Rutland at 16.3%.
Transactions are rising
Some people are concerned that house prices may fall, but the data that proves house prices will rise is all positive. Among this data is residential property sales. Despite fewer properties coming onto the market, sales numbers are rising. Between July and August, in a traditionally quiet period for the housing market, total transactions rose by 5% to 80,500.
What do we say?
The summer lull in sales activity hasn’t materialised this year. Despite the negativity surrounding UK property, numbers of sales are up, and house prices continue to rise. Across England and Wales, we’re seeing the regions starting to close the price differential with London.
Most towns, cities and regions are experiencing house price growth. Meanwhile, the worst affected areas in London are those where property prices are highest and have increased so dramatically since the end of the Global Financial Crisis. It’s not surprising to our analysts that the more affordable boroughs in London are still performing well – they display all the property fundamentals that drive demand for homes.
The discrepancy between regions (and even different locations within the same region) highlight how to find the best areas to invest in property UK. It is essential to conduct your investment research on definitive areas and not national numbers. This is what our Hotspots Algorithm does, interrogating 108 data points across 324 UK locations.
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