‘Real’ house prices remain subdued
Countrywide research revealed that prices are still 5% below their in more than half of the UK, with little signs of movement. Conversely in the 17 mainly London Local Authorities where house prices stand 10% or more above their previous peak, prices increased by 1.2%, which is a 14% increase over the year.
“With London and the South East accounting for an increasing proportion of economic growth, house building, and mortgage lending, it’s unsurprising that house prices outside these two regions still remain below levels they recorded in 2008,” said Countrywide.
The housing market is still very patchy and the north-south divide remains with 48% of local authorities passed their 2008 peak in London and the South East. Outside of these regions house price growth has been strongest in more affluent areas.
However it is only in Richmondshire, Warwick, Cheshire West, Isles of Scilly and Cheltenham where house prices exceeded 2008 levels. Even in many of the more affluent districts such as York, Bristol and Gloucester house prices remain below 2008 levels.
However, house prices across much of the country remain considerably more affordable than in 2008. At current rates it will take over five years for prices to return to 2008 levels in the hardest hit local authorities of urban northern England.
In all but three London Boroughs – Newham, Barking & Dagenham and Havering – prices have passed their 2008 peak. Land Registry data showed average London house prices are 9.3% above 2008 levels, with Westminster 40% or £200,000 higher.
Rapidly gentrifying Hackney has seen the largest increases outside Central London, with average house prices £67,000 higher or 24% above their peak in 2008.
Grenville Turner, Group CEO said:
“While house price rises in London have attracted considerable attention, in many places outside the Capital little has changed since 2010, and house prices remain well below their 2008 peak. To talk of a house price bubble would be to ignore the four fifths of local authorities where prices remain below 2008 levels and in some cases are still falling.”