London house gap at 20yr high
According to Hometrack Cities House Price Index, the gap between house prices in London and other major cities across the UK is at its widest for 20 years, this is despite reports of a reduction in the gap between regional house prices, city level figures confirm that the slowdown in London is not happening.
Hometrack date showed homebuyers can expect to save on average £300,000 if they buy in Manchester instead of London, the gap however is at it’s biggest when comparing like for like between Glasgow and London where buyers could expect 75% saving.
City level house price inflation is running at 8.3% up from 6.6% in May, the low replacement rate of stock continues to create scarcity and helps to sustain the upward pressure on house prices, added to that the ever lower interest rates have added to an increase in mortgage approvals for home purchase in the past six months.
Richard Donnell, Director of research at Hometrack, reportedly said: “A changing mix of buyers is compounding the scarcity of housing for sale with rising numbers of first-time buyers and investors buying property while having nothing to sell. Only a recovery in the number of moves among existing homeowners or an increase in new supply will ease the current housing scarcity – which seems unlikely in the near term.
“London’s price earnings ratio is at an all-time high, while there remains value in most other regional cities. The pricing differential with London could well assist city regions to attract new investment as the cost of housing starts to influence decision-making for both households and businesses.”
See Hometrack website for full details: https://www.hometrack.com/uk/insight/uk-cities-house-price-index/