The growth in property prices in London and the South East of England has slowed down

The average price of residential property in England and Wales has reached £274302, but if from the calculations to remove London and the South-Eastern part of England, that housing prices are much lower – an average of £185496 pounds. This means that only two regions distort the statistics on £89000 pounds. This big gap was for the first time since 1995.

This imbalance led to the fact that the pace of price growth in London and the South of England began to decline and now the average price increase in these regions is only 4.3% . In contrast, the average price increase for the rest of the UK amounted to 10.7%. At the end of August 2014, the price growth for residential property in England and Wales amounted for the month of 0.9%. Thus, the market is in a state of confrontation between the two parts of the country that are competing and mutually buoyed prices.

After several years of stagnation of the market in 2008 – 2012 years, the state of the real estate market has improved significantly and the activity of buyers and sellers is very high. Meanwhile, the activity of all market participants is still below the pre-crisis level.

On the London real estate market over the past two years, there is the most powerful breakthrough since year 2000. The breakthrough in the London market brought the market to a situation where all the walls began to appear the rumors about the introduction of mechanisms to slow down the inflation processes. On the rumors about a rate hike by the Bank of England that the unusual activity was observed in the property market of London, went to “no” in the second half of the year. But it did not affect positive mood in the residential property market across England and Wales, which are supported by state programs ” help to buy” and steady recovery of the UK economy after the crisis.

Thus, there is absolute certainty that the concerns about a bubble in the real estate market of London is exaggerated and the market shows fluctuations that are inherent in healthy real estate market.

® Helen Entree. 15.09.2014 g.

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