Thanks to the world economic events over the past few years, the UK as a whole has noticed plenty of change when it comes to the housing market and the prices for properties. The majority of the country has noticed a slump in property prices – leaving a lot of people with recent mortgages in negative equity – however in other parts of the country, particularly in the South, this couldn’t be further from the truth. Particularly in London, house prices have soared with the demand for housing rising due to the expanding population, and as a result of this the average prices for the area have been boosted beyond what has been experienced by the rest of the country. It seems as though there is a definite divide between the north and south of the country – with very opposing experiences when it comes to property sales.
Astonishingly, across London as a whole, the average cost for buying a house has now broken the barrier of £475,000 for the first time ever recorded. This is shown by records that are held by the Land Registry, and these figures showed that last month alone, the property prices in London rose by an astonishing 0.7% – making the increase much higher than anything experienced across the rest of the country, where prices are rising much more slowly, if at all.
Benefitting from the most significant annual price increase was Newham, with property prices in that area rising by a huge 17.5%, meaning that the average price of property there broke the £300,000 barrier for the first time. This shift means that there are now only two areas where this barrier has not yet been broken. The first of these is Barking and Dagenham in the east of London, where the price for the average property is £277,044, and Bexley, in the south-east of the city, where the average is slightly higher at £289,750.
Although it may seem as though these two areas as falling behind many other boroughs in the city, this may not be the case for long, as figures are showing that Bexley in particular is currently experiencing a rapid price rise, and is presently the seventh fastest borough when it comes to rising house prices. Not far behind is Barking and Dagenham, which is currently in eleventh place on the list, sitting right next to the borough of Hackney. With these statistics released, it is clear to see that it won’t be long before the prices of all London boroughs break that significant £300,000 barrier – meaning that the average property prices of the whole of the city are much higher than in other areas of the country.
Astonishingly, by breaking down the statistics from all over the rest of the country, it would appear that the increase in house prices rose at twice the speed in London that it did in anywhere else in the country. Whilst the country as a whole experienced increases of around 4.6%, London’s property market boomed to the tune of a massive 9.1% in comparison.
The best performing area with regards to increasing property prices was Reading, with many choosing to live here in order to gain easy commuter access into the city of London. The prices of homes here shot up an entire 13.3%, and this is thought to be due to the up and coming high speed train link, which will reduce commuter times into the West End of London by providing a direct rail link for the first time in the history of British transport.
With this information, it is important to think about the reasons that prices are on the rise, and what this might go on to mean in the years to come. It has been predicted by experts that the property prices across the UK as a whole will rise by 25% over the upcoming half-decade, meaning that more people than ever will find it a struggle to get onto the property ladder. This is thought to be the case because there are fewer homes being put up for sale, with the population expanding at a greater rate than new homes can be built in order to meet the demand.
Shockingly, when analysing the numbers of homes that are currently up for sale, the figures are lower than they were when the records began back in January 1978. The supply of new homes is lower than it has ever been, despite the fact that the population is expanding at a high rate at the same time. There are more enquiries from new buyers about purchasing a property, or gaining finance, than there have ever been, yet the demand simply doesn’t seem able to keep up with this.
It is thought, however, that things may be about to change thanks to the recent victory by the Conservatives at the General Election. According to experts, a majority Conservative government may just be what the housing market needs in order to be able to boom again as it has in the past. However, any solution will not be a fast one – with prices anticipated to rise before the demand starts to be met. Thanks to the tight supply of housing for new buyers in particular, it is likely that the average price of a new home will rise further in the coming months, as predicted by mortgage lenders.
This is not only bad news for potential new homeowners, but also for renters, with the average price of a month’s rent being forced to rise also, to meet the Landlord’s cost of owning the property. So, whether individuals are renting a property or looking to buy their own, it would appear that all may well be affected by the recent upward trend in house prices. Experts will watch with interest during the first year of the new government to see what can be done in order to make housing more affordable for the masses – a step that must be taken.