Ever sat on the tube dreaming of rolling hills, baby lambs and country roads where the kids can ride their bikes? You’re probably not alone, but taking the plunge and upping sticks to the country side may be an irrevocable decision – be warned! London house prices are surging so rapidly upwards that moving out of the capital means you probably won’t ever make it back. Location: London vs rest of the UK is as prominent a subject as the changing weather!
The property price gap between London and the rest of the UK has reached ultimate heights. The record divide, revealed in data from the Land Registry, shows that a typical London property now costs £463,872 compared with £180,252 across England and Wales.
So basically, buying a property in London is going to cost you over two and a half times more than buying elsewhere. Got a seven figure budget? You could easily get yourself an Islington town house, or become the proud owner of a Scottish stately home. Perhaps you fancy a one bed flat in London’s Kings Cross? You could get yourself a nine bedroom mansion in Devon for the same price. It sounds ludicrous, but people often choose to squeeze themselves into tiny London flats at inflated prices; to quote Lord Harold Samuel – it’s all about ‘location, location, location’.
In London, the indicators of an overheated market are showing and then some; recent data from Nationwide Building Society reveals that London property prices have risen by 18pc from the year before. With supply being limited, and demand being high due to the allure of London’s trendy image, jobs etc., buyers are increasingly desperate, prices remain sky high and the only way is up.
This trend leads to a shortage of stock for sale in the capital, which results in house sales and auctions consisting of frenzied gazumping and last minute offers. People are holding on to their homes in London; less property available means less choice for buyers meaning hugely inflated prices on desirable properties – Catch 22 comes to mind…
Moreover, building companies are having to build to keep up with the demand, thus losing parks, green space, and having to build increasingly close together to cater for as many consumers as possible. Even if you get along with your neighbours, living on top of them is never going to be practical. 28,000 houses were on track to be newly built in 2014, but it was forecasted by Savills that realistically, around 50,000 would be needed to meet growing demand.
This isn’t just a matter of the North/South divide anymore, ‘The contrast between London and the rest of the UK grows starker by the day. London has almost become a country within a country’, says Jonathan Samuels, chief executive of Dragonfly Property Finance.
Essentially, London has made up its own property rules, and shows no sign of conforming to the rest of the UK any time soon.