This spring the UK’s property market is bucking the usual trend of north/south divides. According to Rightmove, for once it is the more central areas of the country that are driving up average prices.
Their latest figures show asking prices across the country were up by 1.3% in March, matching the largest rise of the last nine years when buyers rushed to beat the stamp duty changes back in March 2016. In the East and West Midlands, prices rose even higher, up by 2.1% on the previous month.
Miles Shipside, Rightmove director and housing market analyst says,
“The price rise crown has shifted from its previous strongholds. The pace is no longer being set by the more affluent commuter belt south, including London with its international appeal. Neither is it set by the cheaper north driven by a mass of investors swooping on high buy-to-let yields. As markets in other areas of the country become more mature and run out of price rise steam and froth, the fundamentals of the Midlands have come to the fore…”
When you look at the figures, the attraction is clear – at around £200,000 for the average house, not only does the Midlands represent excellent value for money, it also, of course, offers excellent accessibility. There is plenty of room for further price rises, too. The West Midlands, for example, is still just 9% above its peak in 2007, whereas London is now around 64% above its 2007 peak (figs: Land Registry).
In contrast, London is going through a period of relative stagnation. Not only is it the area with the most stretched affordability, but, as an international city, it is also disproportionately affected by the triggering of article 50 and the uncertainty surrounding Brexit. And, as negotiations begin in earnest, market sentiment is liable to bounce up and down with the headlines.
It is not so much prices that are being affected, it’s the number of transactions. Hometrack’s data shows there has been a 7.5% fall in transactions in London since 2015, although in the more central boroughs that figure is reportedly far higher. In fact the variation between the boroughs is almost as marked as it is across the country, with the outer boroughs fairing the best. In Ealing, prices were up 6.3% last month and by 4.8% in Harrow. In Kensington and Chelsea, prices fell by 10.9%, although there were signs of a recovery in Westminster, whose asking prices rose by 9.8% (source: Rightmove).