Property prices in London’s commuter belt have performed strongly in the past 12 months according to data released today by the Land Registry.
The figures show that the average house value across in England and Wales rose 7.1 per cent in the last year to hit £191,812.
Reading in Berkshire was the strongest percentage performer in terms of specific area, the in-depth research shows, with values up a whopping 16.1 per cent to reach £270,146.
Hot on its heels was Luton, Bedfordshire, with 15.7 per cent growth, and then Slough, Berkshire and Thurrock, Essex, both up 15.1 per cent.
Those choosing to move out of London to find ‘better value’ could be a major driving force behind the rises.
In Luton for example, despite the boom in house prices, the typical home sells for £166,760 – £25,000 less than the typical home in the rest of the country.
This compares to £530,409 in the capital, which itself saw values rise 13.9 per cent in the last year.
Jeremy Leaf, a former Royal Institution of Chartered Surveyors chairman and current North London estate agent, said: ‘While the increase in London property prices highlights the shortage of housing in the capital, the biggest hike in values in the past 12 months was in Reading, where prices are rising because of its commutability.
‘Buyers are finding better value than in London although if property prices continue to rise at the same pace that may no longer be true.
‘With trains taking only half an hour into Paddington, you can get there faster from Reading than the suburbs, while living in parts of Berkshire will mean a reasonable quality of life.’
The data shows overall house prices were up 2.5 per cent in January, with the strongest value rises being reported in Wales, at 3.7 per cent.
Property prices fell in the North East and North West in January, by 1.6 per cent and 0.4 per cent respectively.
The Land Registry also said the number of property transactions decreased over the last year.
From August 2014 to November 2014 there was an average of 81,656 sales per month. In the same months a year later, the figure was a lower 78,652.
The data also showed that the number of million pound house sales has not fallen despite higher stamp duty bills for those buying in the top bracket.
The number of properties sold in England and Wales for more than a million in November 2015 increased by 14 per cent to 1,091 from 953 in November 2014.
Earlier this week, it was revealed by the British Bankers’ Association that mortgage borrowing surged by 38 per cent in just one year, driven largely by investors looking to beat the imposition of extra stamp duty on buy-to-let properties.
Gross mortgage borrowing hit £13.6billion in January, the biggest monthly total since mid-2008.
Howard Archer, chief UK and European economist at IHS Global Insight, thinks that house prices will rise by around six to seven per cent in 2016 ‘amid healthy buyer interest and a relative shortage of properties.’
However, he believes the looming referendum on Britain remaining in the European Union could potentially rock the housing market.
He said: ‘A potential major downside risk to housing market activity and prices comes from the vote on EU membership on 23 June.
‘A vote for Brexit would be liable to see a marked hit to UK economic activity over the rest of this year and in 2017 amid heightened uncertainties, which would likely weigh down heavily on the housing market.’
(Article available on: http://www.thisismoney.co.uk/money/mortgageshome/article-3465412/Luton-Reading-Slough-Thurrock-Britain-s-house-price-hotspots-values-rising-15-past-year.html)
For more information on Luton property investment please visit http://www.ultimateconnexions.co.uk or get in touch with Sam Bains on 01582 222 444.