If you’re currently trying to buy a home, or you’re simply interested in property prices in different parts of the country, it can be intriguing to take a look at the official statistics to see which areas are rising in value more quickly than others. Perhaps you have money to invest, and are considering buying a property to rent? Many people would simply assume that the highest price rises will come from the south, most predictably the London area thanks to its usual affluence when compared with the rest of the country, however this has been proven not to be the case in recent analysis of the market.
Surprisingly, after a report completed by the Land Registry, it was found that Yorkshire and The Humber had the highest price increases last month, putting them ahead of many of the stereotypically more affluent areas of the country.
Astonishingly, the area achieved a monthly increase of 2.7% – which is even more astounding considering the fact that they only managed a yearly increase of 3.1% in total over the past twelve months. This increase leaves the average price of a home in this area at £123,471 – which is still a fraction of the price you could expect to be paying in the City of London. Despite this hefty increase, the area is still only sixth out of ten in a list of the fastest growing regions in the UK, with several more outperforming it.
Despite London not coming close to the Yorkshire and The Humber price increase on a monthly scale on this occasion, it still clearly surpasses all other areas of the country when it comes to annual increases – recording an average house price increase of 10.9% over the past twelve months.
One of the reasons that London’s prices have been less affluent than usual is thought to be because of the current proposed “mansion tax” that has been suggest for buyers of more expensive properties. With this, alongside the existing stamp duty that buyers of more expensive properties have to pay, buyers in the London area may not be able to afford property at as high a price as they would once have been able to without such taxes being in place.
Experts believe that, once the dust settles in the light of this new proposal, property prices will start to move again as the market settles back into its usual rhythm. Until then, however, other areas may enjoy being higher up in the statistics than they might have been in the past, including the south east of England, between the areas of Berkshire to the Isle of Wight. This area was placed second on the statistics table, with an increase of 8.8% over the course of the previous year – an impressive price rise when compared with other areas of the country.
In the Southeast, property prices are currently an average of £244,238, and even though this is after a significant increase, they are on average £200,000 cheaper than their London counterparts. This being said, with the average cost across the whole of England and Wales being £179,817, it is clear to see that the Southeast is ahead of the game in this respect with considerably higher prices on the whole.
In contrast to the booming property prices in many areas, two areas of the country experienced quite the opposite – a price drop. Wales and the North-East of England both suffered drops, at a level of 1.1% and 0.5% respectively in the previous month. Not only this, but the Northeast suffered a price drop annually, at a level of 0.6%, in total contrast to what every single other area in the UK experienced.
It is important also not only to know which areas have experienced changes in house prices, but also what could cause those changes. One of the main issues is relating to supply and demand. Where there is a higher demand for housing, and not enough properties to meet that demand, prices tend to be higher as more people are battling to own the same property. In London, when a property is put on the market, it is normal for it to go above the asking price – however further North in the country, it is more likely that sellers would eventually choose to accept an amount that was lower than the original asking price, simply because the demand is not usually great enough to have more than one person interested in buying the property.
Another factor that could add to the demand for property is immigration. In areas where there are higher levels of immigrants trying to make a home in the UK, it can be found that property prices are higher, as it can increase the demand and the pressure on the suppliers to have enough homes for all that want to buy.
It is also key to consider the incomes of the people who are buying homes in particular areas. In London, incomes are typically higher than they are in the North of the country, meaning that anybody who is buying a home here is likely to be willing to pay a higher price. Add into this the fact that getting a mortgage is beginning to become easier after the wariness from the banks following the economic crisis, and it is clear to see how property prices in certain areas can rise dramatically in comparison to others.
If you have been considering investing in the property market, or taking the first step onto the property ladder, it is important that you understand the current and potential future trends in the market, so that you can best decide what to do with the funds you have available. Though the markets have been slightly rocky in recent years, it seems likely that, as predicted, they will start to stabilise with the majority conservative government now in power. This seems to be good news for those wanting to buy, but only time will tell for sure.