There may be some envy in other parts of the country regarding the success London’s had when it comes to house prices. After all, over the last decade or so, people have seen incredible returns on their investments – particularly those who purchased property in Central/Prime London.
However, there are benefits for homeowners living outside of the UK capital – in two words: the ripple effect. And the South East has recently been on the positive end of this boom, with property there up ten percent in comparison to a year ago, according to Rightmove; while in London there was a 9.6 percent rise, making this part of the UK the strongest performing region in the country over the last year.
Upwards price pressure is being further fuelled by the reluctance of homeowners in the key spots in the South East to put their homes on the market. This is creating a shortage for those looking for more spacious properties outside London. Across the country, the price of property going on sale in October has increased by 2.6 percent in comparison with September: pushing the asking price of the average property up by nearly £7,000 to £271,669, according to Rightmove. The South East is also predicted to be the region with the highest increase in property values in the next five years – the average price is set to grow by 30 percent nationally, but by 37 percent in the South East and 33 percent in London.
This is important news for landlords looking for their next rental “hotspot”. After all, commuter towns are key attractions for those looking to travel into London each day, so areas around transport hubs are likely to be lucrative. Families especially are likely to be attracted to the region, thanks to larger properties and lush green countryside.
Slowdown in growth
However, despite the good news for homeowners in London and the South East, Rightmove concedes that house price inflation overall has slowed. The 2.6 percent national monthly asking price increase is the lowest October rise for six years. Therefore if landlords are looking to sell, it could be an idea to be realistic as to the price that can be achieved. Rental markets have also slowed down, with monthly rates paid by tenants falling in eight UK regions in September, said the tenant referencing agency HomeLet.
It’s always important to take in the bigger picture when looking at house price growth overall. Some regions will be more sought-after than others – and of course it’s worth remembering that there’s still a problematic shortage of property. London and the South East continue to soar in popularity, so prices are unlikely to fall dramatically. It’s worth bearing in mind that interest rate increases, further tightening of mortgage rules as well as the proposed mansion tax set to be introduced by the Labour Party if they gain power next May, could all further affect the economy.
If landlords can find buy-to-let deals and properties that need renovating in the South East, they could make a great profit in the coming years.