Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Tuesday, 1 March 2016

City vs. Regional

Gosh. The gap between house prices in the UK capital city of London (& the South East of England)  and the rest of Britain just keeps on accelerating. 

The latest UK Land Registry data for January 2016 reveals how in many regions house prices are struggling to get back to where they were before the 2007 crash. 

Meanwhile London prices, charted here in British pound sterling, have virtually ripped off the top of the chart (actually they did, and I changed the y axis). 

To make the data more readily comparable, the chart below indexes regional prices as at January 1995 to 100. 

The index results range from 176.8 for the North East, to an astonishing 576.0 for the capital city, London.

Before the financial crisis seminar promoters frequently liked to encourage price speculation with the use of 100 per cent mortgages on the basis that "property always goes up". 

In the end this may have worked a treat in London, and to some extent in the regions immediately surrounding London where prices have been pumped higher by demographic flows and the restrictive "green belt" policy.

In the regions away from London, though, not so much. Caveat emptor.