For months now, a number of house price indices have told us that the market in London is on a very different plain to the rest of the UK.
The average price of a London home recently went above £500,000 for the first time, according to the Office for National Statistics, thanks to a 19% leap from the previous year.
By contrast, the nationwide average lingers behind at £272,000. Despite impressive house price growth in other areas of the UK, London continues to power away in a league of its own.
A new (and detailed) infographic shows us more about how prices compare between London and the rest of the UK.
One way of thinking about the price disparity is to consider what a set amount of money will buy in different regions. It’s remarkable to think that the colour of £1 million will net a 20-acre landmark estate in Scotland, but just 460 square feet in central London.
The obvious question to ask is: how can we afford to power the market in this fashion when wages rises remain so low?
The answer is that we can’t – not on our own. A healthy percentage of housing market activity is powered by wealthy foreign investors, who see London as an ideal investment opportunity. Rents are strong, yields are good, and the broad international appeal just keeps driving prices upwards.
Infographic courtesy of WeBuyAnyHouse.co.uk
London also attracts interest from overseas developers, who are freely able to market attractive new property in their homelands.
A good example is the Circus West Development by Battersea Power Station. A strong marketing campaign by the Malaysian-supported development company to wealthy Asian investors ensured that the first 866 apartments were sold before the work had even started.
Though the markets are expecting house price growth to cool as affordability reaches stretching points for Brits, we can expect global interest to keep London well ahead of the rest of the field for the foreseeable future.