South East set for 5-year boom
The South East (10.0%) has overtaken London (9.6%) as the area with the highest annual house price increases according to Rightmove’s House Price Index.
Over the next five years property prices in the South East are expected to increase by 37% compared to 33% in London and 30% on average.
Miles Shipside, Rightmove director and housing market analyst, said: “The ripple effect of buyers priced out of London combined with those cashing in and moving out of the capital means that the South East has taken London’s boom-town crown.
“Upwards price pressure is being further fuelled by a reluctance of home owners in the hotspots of the South East to come to market.
“Some can see the value in holding onto their fast-appreciating property asset, whilst others cannot find anything for sale locally on the market that tempts them to sell and move on.”
Seller numbers have increased by 3% monthly in the South East, the lowest pick up in properties coming to market.
Shipside added: “The South East has kick-started its journey on the five-year road to the highest growth in values by overtaking London in this month’s index.
“Those looking for the best price appreciation in the country should seriously consider the South East, and some may wish to fine-tune their search to the top three locations of Southampton, Brighton and Luton.
“This is not an opinion-based prediction but the most comprehensive data-driven forecast ever produced, and it shows gains of over 40% in those areas.
“They are either due a price over-spill from neighbouring areas, have good transport links with London, or both.”
Marc Cox, director of Brighton-based Mishon Mackay, explained why homes in the area are sought after.
He said: “Brighton benefits from being only a 50 minute commute into London which means that price rises in the capital have always had a knock on effect on prices here.
“In the past year prices have gone up around 20% and the demand from non-residents means we’re now seeing one bed flats going for £200,000.
“We recently sold subject to contract a three bed terraced house in an area right next to Hove station for nearly £500,000, which 20 years ago would have sold for about £35,000.
“So while the demand is there from buyers, the uncertainty of interest rate rises, the upcoming election and how tough it is to get a mortgage mean that supply is only slightly up on last year and there’s still only around half the stock that we had back in 2006/2007.”
Rightmove’s index also revealed that the property price inflation slowed in October from 7.9% to 7.6% after recording an increase of 2.6% monthly.
New sellers are up 10% compared to October last year, while Rightmove’s national time to sell index is up from 65.8 days to 67.8 days this month.
With this increased choice for buyers and an easing up in the rush to sell, Rightmove commented that asking prices may be too optimistic in some parts of the country where the supply of homes exceeds buyer demand.