House prices in London’s commuter belt have soared in the past year as demand grows for property in easy reach of the capital.
According to the latest Land Registry house price index, Slough experienced the greatest annual price increase in February with a movement of 19.0% to £236,023. Thurrock saw a price rise of 17% to £194,207 while house prices in Luton went up 17% to £169,184.
Monthly house prices in England and Wales dipped 0.2% to £190,275 in February. The annual price change now stands at 6.1%.
London continues to drive house price growth with a monthly increase of 0.6%, taking the average price of property in the capital to £530,368.
At 13.5%, the annual change for London is significantly higher than most other regions.
Hillingdon had the highest annual price rise of 17.1%, while Hammersmith and Fulham experienced the highest monthly price increase of 2.2%.
The South East was just behind London with annual price growth of 10.9%, while the North East was the only region to see negative annual price growth of -3.2%.
Richard Sexton, director of chartered surveyor e.surv, said: “A lack of supply from sellers is restricting the property market – seen through a slowdown in sales figures from last year. Those moving are facing fewer options, encouraging many to stay put and therefore reducing choice for all in the market. And first-timers are feeling the effect.
“It’s not just a lack of choice – but a lack of funds is holding some back as prices keep moving upwards across the country. London may be leading the way but the South East is catching up, alongside the East of the country – creating a corner of formidable property price growth. While encouraging anyone selling a home in these areas, this is also a potential obstacle for some buyers. Savings are struggling and government initiatives like the Lifetime ISA are still a drop in the ocean when it comes to building a deposit.
“It’s in the North East that first-time buyers are most likely to get value for money – and most likely to get a foot on the property ladder. It a fact that imbalances in the UK’s property market are becoming ever starker.”
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Although February’s house prices saw a slight monthly dip, year on year, the cost of property is ever increasing. The gap between house price inflation and earnings continues to grow at a rapid rate, leaving many people unable to climb onto the property ladder and secure a home for their family.
“We need to tackle this ongoing crisis with real action if we are to meet the housing needs of current and future generations. Building at least 250,000 new homes a year is a must, but this alone may not be enough as the population grows. Innovative new initiatives such as modular housing programmes can dramatically reduce the time it takes to construct a home, providing another important way of working towards this goal. Other measures, such as a relief in Stamp Duty for downsizers, should also be considered, as this will help to free up a vast amount of existing housing stock for those moving up the property ladder.”
