Property Price Growth Spreading Across the UK

The latest Rightmove price index confirms the trend that London’s buoyant market is now rippling out to the regions.

The data, based on asking prices by agents and vendors for homes advertised on the portal, shows a 7.3 per cent annual rate of increase. This is the highest since October 2007 and takes the market back to pre-credit-crunch levels.

New ‘record’ asking prices across southern England as a whole have taken the average in that half of the country to £262,594 – that’s up 2.6 per cent in just one month. By contrast, northern regions are still an average of six per cent behind October 2007 levels.

Meanwhile the number of properties coming to market so far in 2014 is up 13 per cent on last year but supply shortages are still fuelling price rises in many areas in the south.

Rightmove housing market analyst Miles Shipside says: “The ripple effect from the capital means other southern regions are starting to play catch-up. While London’s new sellers are asking an eye-watering £168,711 more than six and a half years ago, the northern regions are actually down by an average of £10,653, with the north west specifically still £16,049 adrift.”

But like many analysts he is wary of how the mortgage market review, which will create tougher lending conditions imposed on borrowers from the end of this month, may knock back the market as spring continues.

“If this hits a substantial number of potential purchasers then it could drive buyers out and force sellers to moderate prices. While some prospective buyers will fail the more stringent checks, we suspect the drop off in approvals is more to do with slower processing by lenders as new systems are introduced to comply with the MMR requirements, and volumes will recover” he says.