Is London influencing the south-England property market?

 
Is London influencing the south-England property market?

London has been the focal point of strength in the UK property market for the past few years since the financial crisis struck down the sector across the UK - of that there can be no doubt - but could the strength seen in the capital now be starting to spread across the rest of southern England?

Last year, London welcomed price rises of some 13.2 per cent on average compared to a nationwide mean of just over six per cent, and this is now a north-south trend that is starting to spread further afield. 

It comes as vendors nationwide look to get more for their property when selling, which is hardly surprising when we consider that there are nearly ten buyers chasing every house that comes up for sale. It's a sellers market at the moment, and many are trying to maximise their return.

Asking prices hit an all-time high in March to sit at more than £262,000 for the first time, according to Rightmove. This was backed up by annual growth in asking price of 7.3 per cent, the largest rate of acceleration recorded in the UK since October 2007, when the market was really at its peak.

And it's these peaks that we can look at as being the real indicator of how the south as a whole is now starting to perform exceptionally strongly, rather than just London.

The 2.6 per cent increase in asking price that was experienced in the last month alone shows just how confident sellers are about getting the amount of money they are looking for at the start of this year, and this is reflected in the way the sector has continued to grow.

Asking prices across the south of England are now back at above the peak levels that were seen back in 2007 before the economic crisis struck down the market, but given that national asking prices are at record highs on average, this can mean only one thing - a real divide in the market. 

In the north, while the sector has started to pick up somewhat, asking prices are still lagging way behind, and they remain a full six per cent behind the peaks that had been seen in 2007.

"Records are tumbling, with a new national asking price record being set for the second consecutive month. London's asking prices are at their highest ever level, and the strong ripple effect from the capital has also caused a new wave of record prices for property coming to market in the south-east, the south-west and East Anglia," said Miles Shipside, Rightmove director and housing market analyst.

He went on to say that in the south, nearly every area is now seeing properties coming up for sale for prices that are higher than the website recommended at the peaks in 2007.

Mr Shipside believes that this comes from the ripple effect from London, and with the business sector in the capital now also picking up since the economy started to recover in the second half of 2013, it could be a trend that continues to be a reality moving forward. 

When London companies start to employ more people, the south of England can only benefit from an increased number of commuters and subsequently property buyers.