As we’ve reported before, the trend of rising house prices has been a constant in the property market, and is still showing no signs of slowing down. More and more areas in the UK are reporting rocketing prices, and in London this is no exception. A report from the Telegraph online states that one particular area of England, the South East, has seen a marked increase in property price tags. So is this the next spot to become too expensive for people to afford?
The article that appears on the website presents statistics produced by the Office for National Statistics (ONS), and it went on to state that property values climbed 7.6% in a year from last February to this February, and prices in South East England shot up by 11.4%, with people now looking further afield to buy homes as the capital becomes unaffordable. East of England had risen to 10.3%, whilst the capital had seen growth of 9.7%, according to new figures from ONS. Now, it records that the new average house price in London is £524,000, which is an increase of 49% compared to the peak before the crash in prices.
Even though prices in the capital are increasing, other areas are not experiencing such growth, the article continues. Nick Leeming, chairman of the estate agency Jackson-Stops & Staff, says that ”this follows lower levels of demand at the top end of the market…which stems from higher transaction and holding costs, such as the revisions to stamp duty, which is adversely affecting both domestic and overseas demand. This means that vendors in the capital who need to sell are reducing asking prices in order to do so.” However, he went on to say further that he doesn’t believe that house prices in the capital has reached its peak yet.
A few more figures mentioned in the report presents that newly built homes had a growth of 9.3% in 12th months from last February, whereas Scotland saw a fall of 0.8% in 12 months. Stephen Smith, director of housing partnerships at Legal & General, stated: ”With the demand for housing continuing to grow, amid a lack of supply, it’s hard to see anything other than more rises to come in the short to medium term.” He says that it would be unlikely house prices would stop rising any time soon. He continued: ”The UK housing market is paralysed by the mismatch between supply and demand, and unless all parties with a vested interest in solving the crisis make a concerted effort to work together, we will continue to have a dysfunctional market, where the real loser is the consumer.”
Overall, there has been further proof that the housing market has increased and will continue to increase in future, but it is now spreading to areas of England that are reporting growth at an higher rate than usual. There may be more reports to come if other areas, like the South East, are to become just as expensive as London, if not more.