The ripple effect generated by Londonës exorbitant property market, which led to house-buyers fleeing the capital to its surrounding regions in search of a more cost-effective deal, has driven selling prices in the south-east up by 10%, according to a new report from Rightmove.
The 10% increase is measured over a 12 month basis, and is even larger than the 9.6% upsurge in property prices seen within the capital over the same period. This is the first time annual price growth has been higher in a region outside of the capital since records begun.
It would appear thereís been an outflow of property seekers from the Capital, disillusioned with over-inflated housing costs perpetuated by foreign investment and cash-rich oligarchs, and these individuals have migrated to the south-east which is fast becoming a property hotspot.
Housing experts are projecting prices in the south-east to grow at an even faster rate in the coming months, as the reluctance of homeowners in the region to part with their abodes means the supply in this area is scarce. Houses in the surrounding vicinity of London are all anticipated to increase in value, according to Rightmoveís monthly asking price index, one of the most influential metrics in the property sector.
ìThe ripple effect of buyers priced out of London combined with those cashing in and moving out of the capital means that the south-east has taken Londonís boom-town crown,î said Miles Shipside, a director at Rightmove.
ìUpwards price pressure is being further fuelled by a reluctance of homeowners in the hotspots of the south-east to come to market.î
Earlier this month, Rightmove devised a report alongside independent global forecasting firm, Oxford Economics, in which both parties concluded that the south-east would harbour the properties which increase in value at the fastest rate over the next 5 years. According to this report, UK average asking prices would increase by 30%, with those in the south east rising by 37%.
Mr Shipside also declared that: ‘The South East has kick-started its journey on the five-year road to the highest growth in values by overtaking London in this monthís index. Those looking for the best price appreciation in the country should seriously consider the South East, and some may wish to fine-tune their search to the top three locations of Southampton, Brighton and Luton.’
Southampton is the area thought to oversee the swiftest rise in its housesí market values, with prices expected to surge 43% by 2019, and homeowners expected to see an extra £100,000 due to their propertyís propelling value.
On a month-month basis, properties across the UK increased by 2.6% for October on September. This means an average UK property now costs £7000 more, standing at £271,669. Though this figure is still dwarfed by Londonís average property value of £596,692 ñ the south east has caught up with the capital somewhat, with its average property going for a cool £355,874.
A monthly rise of 2.6% is consistent with housing expertsí majority perspective that the housing market is undergoing a gradual slowdown, especially when Octoberís typical frenzy is considered. This hyperactive activity has not occurred this year at all, with a pending interest hike perhaps a factor in would-be homebuyersí minds. This is further underlined by Rightmoveís national ëtime to sellí index, which is up by 2 days, suggesting transactions are taking longer to complete possibly as a result of buyers disinclination to engage in the market.
However, banks will hope to stimulate activity as a burgeoning price war looms over the horizon, with HSBC bringing out their record low 0.99% rate mortgage this week.
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