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Sunday, 27 September 2015

London house price gap to a 20 year high

It's not only Australia where capital city prices are leading regional prices in the low interest rate era.

Interesting research from Hometrack this week showed that London and Cambridge continue to lead UK house price growth in the year to August 2015, just as they did in the year to August 2014. 

Since the 2007 market peak house price growth has been led by Cambridge (+44 per cent) and London (+42 per cent).

Not so much doing elsewhere, with the honourable exception of another London "echo-boom" and famous university city, Oxford (+34 per cent).

Indeed, in many cities house prices remain well below the levels seen at the 2007 peak, particularly in Belfast (-47 per cent), Liverpool (-13 per cent), Edinburgh (-13 per cent), Glasgow (-12 per cent), Newcastle (-8 per cent), Birmingham (-3 per cent), Sheffield (-2 per cent), and Manchester (-3 per cent).

Which is all worth remembering when you hear people referring to a "UK property bubble".

It's really an under-supplied London and south-east boom with not a lot positive having happened elsewhere for nearly a decade now.

Hometrack also found that the price gap between London and the rest of the UK continues to widen due to its ongoing relative outperformance, with the differential now rising to a 20 year high.