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Monday, April 28, 2014
What’s more, it is clear that house prices are now a powerful political commodity and no government wants to see falling prices in its term. Of course, history tells us that what goes up, can also come down, so one wonders where will this lead in the future? Common sense tells us that unless wages are going to rise at the same pace, then house prices can’t climb up indefinitely.
Personally, I am not convinced that rapidly rising house prices are always good news for the economy or for society. However, with a general election next May, it looks like prices will continue to recover from the lows of 2013, or that at the very least Chancellor George Osborne will do everything he can to ensure they don’t fall before hand.
This price growth is now having an interesting affect on the UK property market. In the 1990s Devon and Cornwall were popular with retirees from the home counties. From the late 1990s the second home buyer took over, but now we are seeing another profile of buyer driving the market. Record high prices in London are prompting some families in the capital to return or relocate to Devon and Cornwall as they take advantage of the significant gap between house prices in the City and those in the West Country.
Homeowners in London can sell their terraced townhouse in south west London for £3,000,000 and buy a main home in Devon or Cornwall for half that price. They can also buy a flat in London with the remaining balance, which enables them to have a City property to use in the week and keep a foot in the strong London property market. Consequently, in the West Country we are now seeing strong demand for country houses with holiday cottages as these buyers search for a secondary source of income to support their two homes.
With trains from Exeter and Tiverton Parkway just over two hours from Paddington, Devon has appealed to weekly commuters for many years. And thanks to several daily flights from Newquay to London, along with improved infrastructure like Superfast Broadband, Cornwall has now been elevated to the position of a commutable weekend home, rather than just as a holiday destination.
Although it is possible that the London market could be affected by the uncertainty surrounding stamp duty in the lead up to the general election next May, the current difference in price between London property and the rest of the country has never been greater, and I expect this trend to continue for at least the remainder of this year.
For information and advice on similar subjects, please call Jonathan Cunliffe of Savills on 01872 243200 www.savills.com