The UK is suffering from a property price gulf, with homes in London and the south worth GBP 330 billion more on average than properties in the rest of the country. A report by Halifax bank revealed that real estate in the south fetches a collective total of GBP 2,000 billion, compared to GBP 1,670 billion in every other region combined. In practical terms, this means those considering property investment in the North East, for example, will be able to purchase a home at just under GBP 100,000 on average, while a similar house in London will have a GBP 372,000 price tag.
These shocking figures do not only illustrate massive property inequality across the UK, but significant wealth disparity between the south of England and the rest of the country. However, the situation is unlikely to change any time soon. According to Knight Frank, prime central London house prices have risen by 53 per cent since March 2009 and are now 16.5 per cent higher than the previous market peak in March 2008.
With the rest of the country struggling to retain property values, people across the nation will no doubt be asking what London has that other parts of the UK are lacking. It seems that the answer to this question is overseas buyers. Knight Frank claims that over the last three years, investors from Russia, India, the US, Italy and France have been particularly active in the capital, which is also one of the world's leading international business hubs. What's more, the city is considered to be a 'safe haven', in which those with money can invest in assets without the fear of a significant market collapse.
Liam Bailey, global head of residential research at Knight Frank, said: "Our map of local London markets confirms that the worlds wealthy are still drawn to London over the many global city alternatives, although some areas are more popular than others when it comes to attracting overseas buyers."
However, there isn't just a disparity between the north and south and Halifax has recently noted that the country's cities are also pulling ahead in the price rankings. Home values in urban areas have risen more than the UK average as a whole over the last decade, with 67 per cent of cities outperforming regions in terms of price growth. The average cost of a home in a city stood at GBP 173,322 in 2012 - a 38 per cent rise from GBP 125,276 recorded in 2002.
- Tuesday 05 February 2013