Record house prices in South West from 'ripple effect' in London, says Rightmove
A new wave of record prices for property coming to the market in the South West, South East and East Anglia are a result of a “strong ripple effect” from the capital, according to Rightmove.
The report claims that new seller asking prices hit record highs in all four southern regions, pushing the national average to another all-time high.
The “ridiculously tight” housing supply in the south is still a prevalent concern in the market.
Miles Shipside, Rightmove director and housing market analyst said: “Records are tumbling, with a new national asking price record being set for the second consecutive month.
“London’s asking prices are at their highest ever level and the strong ripple effect from the capital has also caused a new wave of record prices for property coming to market in the South East, South West and East Anglia.”
Imbalance between supply and demand remains a major concern, according to Rightmove. Mr Shipside said: “Supply in much of the south is ridiculously tight, with for sale board black spots in many popular locations within easy commuting distance of London.
“There are vicious circles where these is so little property for sale that few local homeowners are willing to come to market to trade up, exacerbating the shortages and boosting sellers’ pricing power.
“While there are some hotspots emerging in the north, the momentum is not nearly as fast-paced and the better match between supply and demand means that the market is running at more sustainable levels.”
Strict criteria in the Mortgage Market Review (MMR) changes coming into effect on April 26 will create difficulties for potential buyers trying to get a mortgage.
Rightmove commented: “If this affects a substantial number of potential purchasers, it could drive buyers out of the market and force sellers to moderate their prices.”
Mr Shipside said: “Given the current absence of a rise in interest rates, it will be interesting to see whether the new MMR affordability tests will be reined in further by the Financial Policy Committee of the Bank of England, further reducing buyers’ borrowing and buying power and putting a brake on prices.”