UK house prices: London is now the third fastest growing region

House prices are growing fastest outside the capital as buyers seek better-value homes with fast commuter links.
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London has been overtaken by the East and the South-East in terms of house price growth, according to new figures released by the Land Registry.

The East, which stretches from Hertfordshire to Norfolk, has recorded an annual increase of 8.4 per cent - almost two per cent more than the property price growth seen across the capital.

The South-East is the UK's second-fastest growing region. Taking in the popular commuter hotspots of Buckinghamshire, Surrey and Hampshire, this region has always closely shadowed London in terms of price rises. 

However, the capital still far outstrips both areas in terms of property values. Average house prices in London are creeping towards the £500,000 mark, practically double that in the East (£210,042) and South East (£254,658).


Sophie Chick, of Savills estate agents residential research, says: "Both regions are well positioned to benefit from buyers looking for more for their money outside the capital, but still within easy commuting distance of central London.”

Research by Savills points to prices in the top two regions rising by about 25 per cent over the next four years, compared to a predicted 10 per cent in London.

“The market in London appears to have got the ball rolling again, as buyers get used to the heavier taxation, and prices in the capital and surrounding regions continue to travel at a much faster pace than up in the North-West, North-East and Yorkshire," says Adrian Gill, director of Your Move and Reeds Rains estate agents.

In fact, the North-West, Yorkshire and The Humber and East Midlands, home to some of the most affordable housing in the UK, all experienced negative monthly growth. Elsewhere, prices in the North-East have risen by a modest 0.5 per cent, and Wales has only just bounced back from negative figures last month, to a 0.2 per cent rise this month.

The South-West, which runs from Gloucestershire to the Isles of Scilly, and the West Midlands, stretching from Wolverhampton to Coventry, are both continuing to show steady growth.

“Sales activity may look slightly subdued on an annual basis, but property sales have actually been picking up speed solidly since the start of the year and rose 4.4 per cent between May and June. Most importantly, the gates are firmly propped open at the bottom of the market, and our own research shows this has been the strongest summer for first-time buyer sales since 2007," says Gill.  

"With an interest rate rise largely speculated to happen next year, the race will be on for many looking to move up the property ladder before borrowing becomes more expensive.”

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