I Don’t Believe it! Reverse Trend in House Prices: Rise in the North-East and Fall in London
The property portal, Rightmove has reported that there have been a sharp decrease in the number of properties being put up for sale, especially in the first-time buyer sector.
According to Rightmove, house prices are rapidly rising in the North East of England and falling in the London borough Kensington and Chelsea.
The average asking prices for a property in the borough fell by more than £178,000 to £2.9m during the month of July, a decline of 7.2% This is the opposite to the North East of England where property prices actually increased by 2.1% over the month to £147,251. This is the largest increase in asking prices for any part of the UK. The South-East, the South-West and the West Midlands all recorded reductions in prices in July.
On an annual basis, asking prices in London saw the biggest gains, rising 7.8% over an entire year, with Wales seeing the biggest fall with a decrease of 1.7%. However, the overall London figure hugely masks the vastly different results from the different boroughs throughout the capital. Areas which were once considered unpopular in the past such as Redbridge, Waltham Forest, Hillingdon and Merton, saw gains of up to 15% over the year, while prices in the higher-priced districts such as Islington, Fulham & Richmond, saw the price of property stagnating.
The average asking price for houses in England and Wales inched up slightly, hitting a record high of £294,542. Despite the high figure, this was only an increase of 0.1% on the previous month.
These figures echo a report which was made earlier this month by the Royal Institution of Chartered Surveyors, Rightmove commented that there was a sharp decrease in the number of houses for sale.
“The number of properties coming to market is running at a weekly run-rate 10.6% below the same period in 2014. The biggest drop-off in fresh supply is in the typical first-time buyer sector with two bedrooms or fewer. The shortage of suitable property for sale highlights the need for an urgent and marked increase in overall housing stock to help keep pace with the growth in household formation.”
Rightmove claim that there is currently a growing battle between first-time buyers and investors involved in the buy-to-let market over the dwindling numbers of two-bed flats and homes available in the UK. Trevor Binch from Coventry estate agents Merrick Binch said: “We’re finding that any properties on the market with us at under £150,000- so your typical two-bed or some three bed terraced- are selling immediately. There are a lot of investors snapping up these types of properties, and this, coupled with the fact that a lot sellers aren’t coming to market, is making the supply shortage worse. While there are some new developments being built in Coventry, there just isn’t enough to satisfy the demand, especially at the lower end of the market.”
It is believed that this surprising trend reversal can be attributed to a slow-down in the demand for properties in the more expensive areas of London, with buyers looking towards more affordable housing both within and outside of the Capital.
The prime London property market may need to find ways to negotiate recent measures imposed by George Osborne, which mean that foreign owners of UK property will face the prospect of paying inheritance tax on properties from April 2017. The most affected areas of London are Westminster and Kensington and Chelsea. It will be interesting to see the effect that the new measures will have on prices in London’s most expensive boroughs.
With the cost of property in the North East on the rise, now could be the perfect time to sell your home and climb another rung on the housing ladder.
There is uncertainty as to how long this house price wave in the North East will last, so why not take advantage of this unexpected increase while you can do. If you are worried that the housing market in the North East is a little slow, then don’t worry, National Homebuyers will buy your house fast!
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