Middle England enjoys Mini-Boom of rising House Prices
Young Londoners fed up living at home and in search of affordable housing are turning their backs on the expensive metropolis, now looking to Worcestershire and Northhants for their first step on the property ladder. As a result, any area within an hour's commute is now experiencing a mini boom of house sales.
Worcester News reported that house prices in Droitwich, Worcester, Malvern and Pershore rose much faster than in other parts of the country, with Malvern emerging as a hot spot for house sales. In some parts of Middle England, house price growth is now double the national average.
In Worcestershire, year-on-year (August 2016 to August 2017) house price growth currently stands at around 7%, and rising. According to property portal Rightmove, the "hottest markets" are currently those of Derbyshire, Northamptonshire and Norfolk, where asking prices are going up by 7.9%, 9.1% and 7.4% respectively. Seen across England and Wales as a whole, that is more than twice the 3.1% annual increase for house prices.
Rightmove's own data corresponds to that of the Land Registry, where Malvern comes out as the winner with an average house price increase of 8.9% year-on-year (June 2016 to June 2017). Malvern house hunters saw the average home price rise from £239,523 in 2016 to £260,451 in June this year.
Over the same period, house values in Worcester rose by 5.5%, from £189,775 to £200,289. In Worcestershire as a whole the annual increase amounts to 6.9%, rising from £212,320 in 2016 to £226,897 this year.
Land Registry figures are regarded as the UK's most reliable indicator for where the market's headed, as the Registry's figures are based on actual house sale transactions.
Estate agent Colin Townsend, branch manager at John Goodwn in Malvern, believes that there are some signs that the mini-boom is slowing. House prices in his territory may have risen all year, especially for the under £500,000 end of the property market, where it is not uncommon now to get several buyers bidding for the same property. However, Mr Townsend believes it is not going to "continue indefinitely".
With places like Northamptonshire being within an hour's train ride from London, it's not surprising that Londoners are fleeing high prices in the capital for more affordable housing elsewhere. According to Rightmove, asking prices in Northamptonshire rose by 2.2% this August, increasing to £256,642 for the average home.
In Greater London meanwhile, house prices have fallen by 1.9% in August and by 1.6% on an annual basis, bringing the average asking price for a London home to £629,270. Across England and Wales as a whole, house price values dropped by 0.9%.
Rightmove's director and housing market analyst, Miles Shipside, said: "The heat has come off much of the market. A combination of traditional summertime price blues and the chill of uncertainty in the air has cooled house price growth in some parts of the country and affordability remains very stretched."
He added that the average house price in Derbyshire for example was £200,000, that's less than one third of the average house price in London. No wonder therefore that property investors are looking towards the Midlands, where returns are far better.
Shipside said: "With a shortage of suitable choice in many parts of the country, buyers are becoming increasingly adept at hunting down property that fits their budget."
Adam Wellesley, director of Horts estate agents in Northamptonshire, said the growth in property prices in his area was “likely to be down to the close vicinity for commuters to get to London Euston, as you can now get there within 48 minutes. You can also get to Milton Keynes by train in 10 minutes, where prices are 20% higher than Northampton."
He pointed out that the buy-to-let property market was also booming, as investors were still able to get returns of up to 10% on properties of multiple occupancy.
