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August 13, 2012
UK House Prices Hit a Four Year High, with London Driving Growth
It was recently reported by Acadametrics Ltd that U.K. house prices reached a four-year high in July as London’s booming property market continued to move upwards.
It has been well publicised that London residential property has become a magnate for wealthy investors across the globe, looking to put their money into stable and low risk assets. However, now more than ever, London seems to be leaving the rest of the country behind.
The average cost of a home in England and Wales rose 0.2% in July to £225,769. Prices rose 3.2% on an annual basis to July. However, when London is taken out of the equation, the picture looks very different. Prices in England and Wales excluding London fell 0.1% in July and annual house price growth to the month of July was just 1.0%.
London remains in a completely different position to the rest of the country. Property prices for the year to June 2012 rose 11.8%. Some boroughs achieved staggering growth. Property prices in both Camden and Westminster grew annually by over 20%, fuelled by foreign investment and a shortage of housing.
Acadametrics chairman Peter Williams commented “This month we report stunning growth in some London boroughs … The Greater London housing market is another country compared with the remainder of the U.K … and is likely to continue to move further out of line with all or most of the market in the rest of England and Wales.”
It seems that outside London, poor employment prospects, difficulty in raising money for a deposit, low confidence levels and relatively little foreign investment, are keeping the market very quiet. Whilst the situation raises questions about the widening gulf between London and the rest of the country and the sustainability of this level of growth, London continues to be and is likely to remain the exception to the rule.