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The London effect?

  London has historically driven the UK’s housing market and this has never been more true than in recent years. London and, in particular, prime central London saw the first signs of a housing market recovery some three years ago and the rest of the country has – albeit slowly – been playing catch up ever since. Recent government figures confirm this. Last year double digit house price growth in London added almost two percentage points to the overall national figure. In other words, at a headline level house prices grew by 5.4%, but 3.5% of this was directly attributable to London. Looking across the country, it’s those counties and areas with higher than average house prices (particularly those over £250,000) that have seen the strongest growth. Land Registry data shows that over the last 12 months, 86% of areas in England and Wales where average house prices were over £250,000, saw the value of their homes rise by 7.5% or more. In lower priced areas – so where average house prices are under £100,000 - just 21% saw house price growth of over 7.5%. In fact some 57% of these areas suffered price falls. This is a complete reversal of housing market trends seen pre economic downturn. Back then lower value areas were the ones that were doing all the outperforming. Between 2001 and 2007 for example, 91% of areas exceeding the headline growth figure were those where properties were worth below the (2001) national average. During and post credit crunch in a period spanning 2007 - 2013, 25 out of the 26 counties and unitary authorities recording price growth were those where values were above the (2007) national average. Furthermore, London topped the list where growth was strongest. Indeed, between 2007 and 2013, 21 of London’s 33 boroughs outperformed any other area in the country in terms of total growth in house prices. Since 1996 London has topped the list for the best performing region in England and Wales eleven times. And a final statistic to finish on - since 1996 the difference between average prices in the lowest priced region (North East) and the highest (London) has risen from 101% to a staggering 314%.

1395912870_London_Effect_Winkworth_blog_small

 

London has historically driven the UK’s housing market and this has never been more true than in recent years. London and, in particular, prime central London saw the first signs of a housing market recovery some three years ago and the rest of the country has – albeit slowly – been playing catch up ever since.

Recent government figures confirm this. Last year double digit house price growth in London added almost two percentage points to the overall national figure. In other words, at a headline level house prices grew by 5.4%, but 3.5% of this was directly attributable to London.

Looking across the country, it’s those counties and areas with higher than average house prices (particularly those over £250,000) that have seen the strongest growth. Land Registry data shows that over the last 12 months, 86% of areas in England and Wales where average house prices were over £250,000, saw the value of their homes rise by 7.5% or more. In lower priced areas – so where average house prices are under £100,000 - just 21% saw house price growth of over 7.5%. In fact some 57% of these areas suffered price falls.

This is a complete reversal of housing market trends seen pre economic downturn. Back then lower value areas were the ones that were doing all the outperforming. Between 2001 and 2007 for example, 91% of areas exceeding the headline growth figure were those where properties were worth below the (2001) national average. During and post credit crunch in a period spanning 2007 - 2013, 25 out of the 26 counties and unitary authorities recording price growth were those where values were above the (2007) national average. Furthermore, London topped the list where growth was strongest. Indeed, between 2007 and 2013, 21 of London’s 33 boroughs outperformed any other area in the country in terms of total growth in house prices.

Since 1996 London has topped the list for the best performing region in England and Wales eleven times. And a final statistic to finish on - since 1996 the difference between average prices in the lowest priced region (North East) and the highest (London) has risen from 101% to a staggering 314%.

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