Midlands leads surge in UK property prices

New research by Rightmove, the UK's largest property portal, has shown that the Midlands is setting the pace for property price increases where yearly growth is outstripping London by nearly 5 per cent.

Midlands leads surge in UK property prices
The Midlands has replaced the London commuter belt as the area setting the pace for home price increases in Britain, according to a survey by the property website Rightmove.

East Midlands: The largest rise

Prices in the East Midlands rose by 5.7 per cent year-on-year in March, the biggest rise of any region in England or Wales. It brought the average home price in the area to £200,620.The region recording the second highest annual rise was neighbouring West Midlands, which recorded a 4.2 per cent increase, bringing the average asking price to £212,798. Rightmove said estate agents in the two regions were reporting record sales with the sale of the properties most in demand going to sealed bids.By comparison, London property prices grew 1.4 per cent between February and March, and 0.9 per cent annually to bring the average asking price to £649,772, most of the growth driven by price rises in outer London.

London no longer setting the pace

Miles Shipside, director of Rightmove, said, “The pace is no longer being set by the more affluent commuter-belt South, including London with its international appeal.“Neither is it set by the cheaper North, driven by a mass of investors swooping on high buy-to-let yields. As markets in other areas of the country become more mature and run out of price rise steam and froth, the fundamentals of the Midlands have come to the fore.“Accessibly and conveniently located in the middle of the country, the area offers mid-range and relatively affordable prices at an average of around £200,000, whilst also exhibiting local economic breadth and strength. As other parts of the country suffer from varied factors such as highly-stretched affordability, changes in sentiment and increased economic uncertainty, it is the 'mighty Midlands' that is the current powerhouse of price rises.”Rightmove's findings follow a report from rival website Zoopla last week, which showed that Northampton in the East Midlands was the town where it was quickest to sell a home, with only 27 days separating the time a property went on the market and the day it went under offer.Rightmove calculated the average asking price of a property in England and Wales in March was £310,108, representing a 1.3 per cent increase on February and only £363 below the record high average of £310,471 recorded last June.

"Continuing resilience of the market"

Rightmove said the latest price increase is an indication of the “continuing resilience of the market” with strong demand from buyers – if properties are correctly priced – and a shortage of suitable homes for sale in many parts of the country.The monthly price increase was similar to the one seen in March last year, although at that time demand was being boosted by buy-to-let investors rushing to beat a stamp duty increase coming into effect on April 1, but Rightmove said annual prices had tailed off, down from 7.6 per cent in the year to March 2016, compared to 2.3 per cent now.And two areas have seen asking prices fall compared to a year ago – in Wales, they were down 0.6 per cent and, in North East England, a drop of 1.1 per cent has been recorded.
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Brian Murphy, head of lending at the Mortgage Advice Bureau, commented, “The data suggests that consumer confidence and demand in bricks and mortar, coupled with a paucity of stock in many towns and cities, is leading to asking prices remaining steady if not increasing in some areas, most notably the East and West Midlands.“Given encouraging activity levels last month, this isn’t a huge surprise and is in line with normal seasonal trends. That said, the annual increase reported by Rightmove of 2.3 per cent is more modest than previous years, but this in itself will possibly be reassuring for many.“This is because we need to be mindful of affordability and any ongoing, significant increases in house prices could create a turbulent market that many would seek to avoid, as it would price many purchasers out of the market.”For related news and features, visit our Residential Property section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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