The recovery in the housing market is being led by London and regions in the south and east of the country. Supply shortages of some types of property, demand from home movers with significant amounts of equity and a relatively more positive economic outlook are pushing up property values. This effect is expected to feed into other parts of the country as the year progresses.
The pick-up in the south is spreading out from the capital, with many of London’s chic boroughs seeing double-digit price rises over the past year.
Property prices in London as a whole are up 8.0% year-on-year, while the ripple effect from London has pushed values up significantly in the South East, with a 4.1% increase over the year. Average asking prices in London are now £436,101 and in the South East £273,433. Prices in the South West and East of England also rose, to £239,460 and £212,712 respectively.
Nigel Lewis, Property Expert at FindaProperty.com, said: "As is often the case, London and the south are leading the housing market recovery. The southern surge is driven by underlying shortages of key property types, and limited availability of land for new build, planning restrictions and population growth.
"Despite challenging economic conditions, most people remain in secure employment. Indeed, many southern homeowners who have built up considerable equity in their properties and are relatively well placed to borrow are taking advantage of a cooler market to ‘leapfrog’ ahead. This created pressure on larger property types, with 5+ bed houses and 3+ bed flats up around 5% over the year, driving overall price rises."
The picture has been less positive in regions further north and west, with annual falls in all regions. Despite improving conditions further south, asking prices continued to fall this month, with only Scotland bucking the trend with a 1.2% monthly rise, but this did follow steady falls over the past year (-3.5%) in line with other northern regions.
Lewis said: "The north and west has suffered more from job losses and there is less pressure on the housing stock, not least with many new build homes lying empty. Even so, I would anticipate the housing market recovery gradually moving north and west as consumer confidence builds this year. We’re not back to boom conditions, and we remain cautious in our forecasts. But there are more reasons to be cheerful in all parts of the country."
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