Priced-out Londoners heading out of the capital

Five per cent house price growth predicted for 2015

Alex Johnson
Monday 20 October 2014 05:45 EDT
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Two bedroom flat for sale, Chatham Place, Brighton, East Sussex BN1. On with Cubitt and West for £200,000
Two bedroom flat for sale, Chatham Place, Brighton, East Sussex BN1. On with Cubitt and West for £200,000

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Househunters in London looking for more affordable homes are increasingly looking outside the city, according to Rightmove's latest report.

Prices in the South East are now rising faster than in London and the survey predicts that the South East will see the biggest hike in prices in the next five years. Overall, the price of property coming onto the market this month has gone up by 2.6 per cent.

It also suggests that Southampton, Luton and Brighton are the 'best property bets'.

"The ripple effect of buyers priced out of London combined with those cashing in and moving out of the capital means that the South East has taken London’s boom-town crown," said Miles Shipside, Rightmove director and housing market analyst. "Upwards price pressure is being further fuelled by a reluctance of home owners in the hotspots of the South East to come to market. Some can see the value in holding onto their fast-appreciating property asset, while others cannot find anything for sale locally on the market that tempts them to sell and move on.

"Those looking for the best price appreciation in the country should seriously consider the South East, and some may wish to fine-tune their search to the top three locations of Southampton, Brighton and Luton.

Strutt & Parker predicts five per cent growth in house prices across the UK in 2015.

Stephanie McMahon, Head of Research at Strutt & Parker, said: "Agents are reporting a continued slowdown in some areas as buyers and sellers nervously await news on the upcoming General Election and the potential for Mansion Tax. This is beginning to feed through into transaction levels. As is often the case in uncertain times, it may also be that transaction levels will decrease in the run up to May 2015, but values could hold up better than expected."

Figures out this morning from the Council of Mortgage Lenders indicate that mortgage lending totalled £17.8 billion in September, one per cent lower than August but 10 per cent higher than September 2013.

CML chief economist Bob Pannell said: "Uncertainty over when we will see the first increase in UK base rates is exacerbated by weaker growth prospects in several major economies, including the eurozone. Recent indicators and policy actions corroborate our view of a gentle easing in market conditions. There is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau."

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