Many people complain about the London housing market, claiming that the soaring prices are locking first -time buyers out the market, or that it’s a bubble being inflated by Help to Buy, a government-backed loan scheme for those who can’t afford a home at market price. There are questions being asked about the way the housing market’s going – with much of the focus on the UK capital and its booming property market.
However, recent research has shown that price rises aren’t just confined to London. Increases are in fact rippling out from the UK capital in six waves, with cities such as Bath, Bristol, York and Manchester particularly benefitting.
Let’s have a closer look at some of these ‘waves’…
First wave (25 percent and above):
We all wished we’d purchased property in Central London areas such as Kensington and Chelsea ten years ago. The borough’s seen incredible price increases of 76 percent and above since 2009. Hammersmith and Fulham also haven’t done too badly, up by 73 percent – with Westminster up by 72 percent. Out of town, Windsor and Maidenhead, commuter belt Surrey and Brighton and Hove have increased by 31 percent. These areas have definitely directly profited from the ‘trickle out’ effect.
Second wave (up to 20 percent):
The second wave includes Hertfordshire and north of Oxford up towards the Midlands. This ripple also affects Bath, which, according to experts; is usually about six months behind London. Prices in Bath often shock Londoners who expecting a bargain, realise they still have to put up a million pounds or so for a townhouse! According to reports, Oxford and Cambridge are also doing well and they are expected to keep their value.
Third wave (up by 15-20 per cent):
This includes areas such as Hampshire, South Gloucestershire, Poole and Dorset – as well as newcomers such as Southend. This popular Essex town has soared due to its proximity to the sea and convenience as a commuter town.
Fourth wave (up 10-15 per cent):
Apparently this includes areas such as East Sussex, Northamptonshire, Solihull, Norfolk, Warwickshire, York and Cardiff. York is doing well, as it’s a cathedral city with a famous university as well as good transport connections. Townhouses are a good bargain too.
Fifth wave (up 5-10 per cent):
Prices in areas affected badly by the credit crunch in 2008 have started to increase – albeit slowly. Devon, Coventry, Cornwall, Herefordshire and Derbyshire have seen a modest upward trend in prices thanks to the ‘London effect’, but the area’s still suffering due to low salaries, so it’s not clear as to how people will afford property in the future.
And finally…the sixth wave:
Areas such as Sheffield, Newcastle-upon-Tyne and North Tyneside have yet to feel the benefits of the property boom in the UK capital. The long-term effects of the loss of the industrial heartland plus the recent recession, means that prices are still low with some stuck in negative equity.
While London has been the prime beneficiary of house price boom, it’s not all bad news for the rest of the country. As to how things will play out going forward is anyone’s guess, but with interest rate rises on the horizon, the market could stablise out in London over the next few years. However, other predictions state that prices will increase over the next ten years, so only time will tell.
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