House prices are turning urbanites into 'rurburbs' - are you one of them?
03-20-2015
More than half of all renters, social housing residences or young people still living at home cannot afford to buy in London
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More urban dwellers - priced out of the city centres - are buying in the countryside according to Experian research. Photo: ALAMY
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By Anna White, Property correspondent
More than half of all Londoners who are renting or in social housing cannot afford to buy a home in the area in which they currently live, pushing more aspiring homeowners into the commuter belt.
House prices have rocketed in London following the 2008 recession and subsequent housing market crash, with values 40pc greater than at their last peak.
But wages have failed to keep pace, leaving the dream of home-ownership out of reach for 54pc of households in the capital.
Across the rest of the UK, 37pc of families, couples and individuals cannot afford to buy a house in their local area, according to a new study from the data company Experian.
Measured by the ratio between income and house prices, Scotland was the most affordable, with only 24pc of households unable to buy locally. In the north east of England the proportion was 25pc.
The South West was the second most unaffordable region, behind London, with 48pc of households unable to move from renting to buying.
The number of houses for sale in the price band £250,000 to £500,000 in 2014 has risen 16pc since 2010, driven by transactions in Greater London, as overseas investors and international employees flocked to the capital.
The influx has pushed people out into the surrounding commuter belt and wider south east region. There was a 37pc increase in the number of properties that sold for more than £500,000.
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First-time buyers, who now need an average deposit of £80,000 to buy in London, are looking further down the train and tube lines to buy their first flat, having been priced out of central London, the research revealed.
In the last 10 years there have been significant and wide-ranging changes to the social fabric of the UK reflected in the property market, said Richard Jenkins, a consultant at Experian.
“A rapid expansion in the rental sector has, for the first time, reversed almost a hundred years of rising owner occupation. We can be seen to be moving towards a more European pattern of tenure.”
The report unveiled a new type of home mover, dubbed a “Rurburb”, who is moving out into the countryside.
“They are responsible for the suburbanisation of rural towns and villages around major cities,” said Mr Jenkins.
“The property market is prompting widespread change in the UK, with the spreading of the suburbs seeing more and more professional families relocating further away from our cities.
“We are now seeing the development of the rural suburbs, which are not quite suburbs and not quite rural, but a mixture of both,” said Mr Jenkins.
Following the Budget, property companies have rounded on the Chancellor for not doing enough to address the housing shortage especially in cities, controlling house prices which are set to spike after the general election, based on analysis by the broker, Jefferies.