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House prices rising faster in South East than London

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Written by: Emma Lunn
21/10/2014
New sellers' price expectations are up 2.6% in October compared to September, according to the latest Rightmove house price index.

The increase means properties are going on the market at an average of £6,784 more than last month.

The index found that new seller asking prices in the South East are 10% up on a year ago, and higher than London’s current annual rate of 9.6%. The South East is now the strongest performing region in the country over the past 12 months.

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. While the South East’s new seller numbers this month are up on last year’s, at just a 3% increase this is the lowest pick-up in properties coming to market in any region in the face of the highest increase in demand.”

Jeremy Duncombe, director of Legal & General Mortgage Club, said: “For housing to be affordable, any property price increases need to be closer to the rate of inflation, otherwise the majority of people risk being frozen out of the market in the long-term.

“Fundamentally we suffer with a severe shortage of housing supply in the UK. However, the good news is this issue seems to be prominent on the political agenda. The government and the industry need to work hand in hand to tackle the problem and to ensure the UK housing market is sustainable and stable in the long-term.”

Meanwhile the latest figures from the HomeLet rental index found the average monthly private rent in the UK (excluding London) now stands at £728 with the average rent in London £1,466. According to HomeLet, eight regions of the UK saw rental price falls during September 2014, while four saw increases.

Despite the rental market cooling, nearly a quarter of all tenants in the private rented sector say they will never own their own home, according to a new survey from Knight Frank. While the difficulties in getting on to the housing ladder are an issue for many renters, nearly a third (32%) of tenants state that they are living in the private rented sector because it suits their lifestyle and/or they don’t want a mortgage.

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