House prices in the UK have seen some complex shifts in recent years. Slow wage growth, Brexit, and other national and local economic factors have seen house prices stagnate in some parts of the country, while in others price performance remains strong. However, it’s London where property prices have been at their most tumultuous.
There are many who would argue that London’s property market was a bubble that was just waiting to burst. With both UK and international investors driving up prices in select areas, many market analysts had been arguing that the capital’s properties were long overdue for a sharp price correction. While other factors have been at play, the 2016 Brexit vote seems to have been the pin that burst that particular bubble.
In the past year, parts of prime central London – including Clapham, Balham and Putney – have seen property prices tumble by as much as 15%. Perhaps more significant is the evidence of price stagnation spreading to districts outside of prime areas. According to Jonathan Hopper, managing director of Garrington Property Finders: “What began as a cooling of prices in the capital’s prime and super-prime postcodes is turning into an ever more widespread frost.”
While affordability issues continue to affect house price growth across the board, some other large cities – including Birmingham and Manchester – are seeing strong price performance, while it seems that house price growth in London is likely to drop below the national average. According to analysis by estate agency group Savills, house prices in London are projected to grow by around half the national average of 14% over the next five years.
Positive signs for East Anglia
Over the past 12 months, house prices in East Anglia have increased by an average of 1.5%, which, though modest, points to a continuing stability in the region’s property market in the face of various pressures. In comparison with the South East, where prices dropped by 0.5%, and especially London, where prices fell by an average of 2.6%, this would seem to be good news for the property market in the East of England.
Savills’ most recent market predictions put house prices in the East of England on track to grow by 11.5% in the next five years, which is in marked contrast to the 7.1% growth predicted for London. As East Anglia’s own economy continues to boom, and with many locations in the region providing easy commuter access to the capital, demand for property in the East of England seems set to grow in the coming years.
According to Savills’ residential director, Peter Ogilvie: “We have seen demand increase steadily over the year, particularly along our heritage coast line – there is strong interest and noticeable growth in second home buyers purchasing homes, often from London and some from abroad.”