UK Property to Grow Faster than London

UK Property to Grow Faster than London.

A report from the CEBR (Centre for economics and business research) has suggested that for the first time in the six years property prices outside of London will grow faster than London in the next year.

The report suggests that:

• London property prices 2015  -3.6%
• Rest of UK property prices 2015 +1.5%

The report suggests that London property prices are currently overpriced and have been for a couple of years and now that earnings across the UK are starting to rise including general standards of living that property prices throughout the UK will increase whilst London falls back. That said, the report suggest that the London property market will again return to growth in 2016 and outpace the rest of the UK with property price rises predicted for 2016 as follows:

• London property prices 2016 +2.7%
• Rest of UK property prices 2016 +2.3%

Comment

The population of London, according to the office for National statistics (ONS), is expected to increase by around 1 million people in the next five years. As such property prices in London will continue to outstrip the rest of the United Kingdom. We suggest that growth in the rest of the UK for property prices has been assisted by various government stimulants such as:

• Help to buy deposit scheme
• Help to buy mortgage indemnity guarantee scheme
• Help to buy ISA for first-time buyers
• Changes to stamp duty which affect smaller value properties below £250,000

In the words of Mark Twain:’ by land they are not making any more'. This will always be the case in the United Kingdom given that we are a small island and the population overall in the United Kingdom is expected to expand by another 10 million people in the next 10 to 15 years as well as our economy is expected to be even larger than Germany's within the next 5 to 10 years.