Where London leads, the rest of the country tends to follow. But the property market of autumn 2015 does not appear to bear out the old adage.
In the latest quarterly survey by the online estate agent eMoov, which tracks supply and demand in the most populated locations in the UK, there are some surprising hotspots and some equally surprising cold spots.
Hotspots where demand is highest
The hottest spot in the whole country – improbably – is Bexley in south-east London, with demand at 77 per cent. (Demand is defined by the number of homes sold in Q3 measured against the number of homes registered for sale, as tracked on Zoopla and Rightmove.)
The former constituency of Ted Heath is not an obviously cool address, despite its macho motto, Boldly and Rightly. But it is in the heart of the London commuter belt, and it is the commuters who seem to be stoking demand.
The hottest spots
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Other commuter hotspots with high demand include Watford (72 per cent), Reading (68 per cent), Sutton (68 per cent) and Barking (65 per cent).
And it is not just in the prosperous South East that the cauldron is bubbling. Demand is high in Bristol (71 per cent) and York (56 per cent).
Cold spots where demand is lowest
If you treat demand as the number of properties sold in comparison with the number on the market, Aberdeenshire is currently the coldest spot in the UK, with demand at just 10 per cent in the third quarter of the year (Q3). That is scarcely surprising given the current dire state of the oil industry. A similar slump in demand can be anticipated in Redcar, following the closure of the town’s steel works.
The coldest spots
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But other property cold spots, notably Westminster (15 per cent) and Kensington & Chelsea (17 per cent), incorporate some of the most prestigious addresses in the land. While oil workers are being laid off in Aberdeen, billionaires are sitting on their hands in Mayfair, biding their time until they see which way the wind is blowing.
Camden used to be one of the hippest addresses in north London, but the hipsters seem to have lost their mojo when it comes to buying property. Demand tumbled by 14 per cent in the third quarter of the year.
The highest climbers
In Chester, not far from George Osborne’s constituency, demand has risen by a thumping 164 per cent – the highest figure in the country – in the last 12 months. Northern powerhouse indeed.
Ealing is another interesting area. Demand in Q3 was a modest 38 per cent, but as that was up 74 per cent on demand in Q2, the upward trend is unmistakable.
Biggest climbers Q3 2014 - Q3 2015
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“In early 2014, we predicted the ripple effect which London would have on the UK property market,” says Quirk. “Well, it would seem that those waves have started to reach some far‑away shores.”
Other high climbers in the last 12 months include such unfashionable enclaves as Dudley (68 per cent), Tameside (64 per cent), Barnsley (54 per cent) and North Lanarkshire (52 per cent). In County Durham, appetite for homes rose by 47 per cent in the last quarter.
Of course, what makes an area a property hotpot is a matter of debate. While thesurvey measures demand, other researchers track the price of properties sold, which produces a slightly different outcome. Even so, a consistent pattern is discernible.
Photo: Copyright 2014
The biggest fallers
Aberdeenshire crops up again as place in the UK where demand has fallen the most over the past year (from Q3 2014 to Q3 2015). The number of homes that sold from July to September compared to the number of homes registered for sale dropped by 50pc.
Newcastle was the second biggest faller with a drop of 36pc and Westminster came in third. Gateshead, Camden and Sheffield also feature in the ten biggest fallers.
What the experts say
Further evidence of a developing bubble in the commuter belt can be found in the latest Luxury Property Index from Savills, which shows that house prices in urban areas designated as “outer commute” have risen by 6.3 per cent in the last year. In “inner commute” areas, they have risen by just 2.6 per cent, while in villages and rural areas they have hardly moved at all.
Stephanie McMahon, head of research at Strutt & Parker, agrees that proximity to central London is no longer as advantageous as in the past. “We predict that, over 2015 as a whole, house prices will only rise by 2.5 per cent in central London, compared with 5.1 per cent in greater London and 5.8 per cent in the rest of the South East; that is, the outer fringes of commuterland.”
Further ahead, Strutt & Parker predicts that, over the period 2015-19, the area likely to record the highest price rises, 21 per cent, is the east of the country, incorporating cities such as Cambridge, Norwich and Lincoln. The South West is also expected to perform well, with price rises of 15.5 per cent.
Predicting trends in property is an inexact science. On the roller‑coaster of house prices, today’s hotspot often turns out to be tomorrow’s cold spot. But the fact that demand for property is rising, not just in the South East, but in communities scattered across the country, must surely be regarded as a welcome sign.