Buyers priced out of the capital
London new home prices have risen by 9.8 per cent over the last 12 months, compared to a UK average of 1.3 per cent. Current migration out of the city could be a result of this price growth, as buyers at the mid to lower end of the property ladder are being priced out of the capital.
While the average price of a new home in many regions across the UK is down from the same time last year, by as much as 8.4 per cent in Wales and 12 per cent in the South West, London properties remain in high demand, resulting in strong price growth.
A new home in London will cost home buyers on average £397,583, making London by far the most expensive region in the UK. Buyers in the capital face prices that are up to £180,000 more than an equivalent property elsewhere in the country.
London has been experiencing increased migration away from the city, which could be a result of this price growth, as home buyers look to nearby regions in the South East and East Anglia where property is more affordable.
David Bexon, managing director of SmartNewHomes.com, said: “The high demand for properties in London has resulted in buyers at the top end of the market offering maximum prices, often over the asking price to secure the property they desire. Consequently, it appears that buyers further down the property ladder are being forced to sacrifice a city home and move to within commutable distances of London.
“Both the South East and counties such as Essex and Hertfordshire have experienced an increased level of inward migration over the last year as prices in the city boom. While these regions are also experiencing positive price growth, they are a long way behind London prices and still offer buyers better value for money, as well as high speed, direct commuting links into the capital.”
City bonuses lead to change in demand
The number of apartments being built continues to rise, now constituting 59 per cent of the total housing mix. Prices of apartments are also on the up, showing a 2.6 per cent rise since April 2006. This could be attributed to the generous city bonuses paid out earlier this year which have now trickled down into the housing market. This buying group is predominantly comprised of young, single professionals, who are looking to purchase new, conveniently located and high quality homes to suit their hectic city lifestyles.
South West is most popular region for new home buyers
The South West continues to attract new home buyers, with more people looking at properties in this region than any other in the UK. The continued interest suggests the region is a popular choice for those buyers looking to escape to the country, whether this be a complete move, or the purchase of a second home. Average property prices in this area remain low, at an average of £240,513, which can be contributed in part to investment from The South West Housing Body into affordable housing in the region.