Are You feeling The Ripple Effect?


You’re hearing a lot about Britain’s housing recovery

Unemployment is down. House prices are ‘booming’. The stock market is even beyond pre recession levels.

(Huge amounts of wealth stand to be made if you make the right investment)

You see, while others watch this unfold from the side-lines, you could be positioned to make a series of terrific profits.

So What’s All The Buzz About?

Well...amongst many commentators, the question is quite simply, is this a frothy bubble or sustainable growth? And To people outside the capital, when will the London effect reach us and where has the ripple reached now?

It’s never easy to spot the exact property trends as many areas have their own micro markets. But one thing is for most certain:

The ‘ripple effect’ is spreading from the capital to the counties as property prices have risen by almost 6.7% in 12 months.

New data showed prices in the capital rose at their fastest monthly rate to an average of £435,034, since Land Registry records began in 1995.

Several areas are now feeling the wrath of the ‘London effect’ particularly Manchester, where prices have soared 18% per cent, compared with 17 per cent for London.

Particularly because the lack of new builds in Manchester has meant demand has not met supply, pushing property prices even higher.

The Ripple Effect From London Has Definitely Reached The North

Although the gap between the capital and the rest of the UK is at its widest ever, other parts of the UK including Brighton (14%), Cambridge (14%), Oxford (13%), Carlisle (13%), Aberdeen (12%), Sheffield (11%), Bradford (11%) and Bath (11%) have seen double digit growth.

It’s important to put into perspective that although house prices are rising, they remain below the peak levels of 2007 in many areas of the UK.

However, they have not stopped unprecedented levels of demand, where certain areas have had 45+ potential buyers registering for each property.

The Shortage Of Available Property Is Creating A Frenzy, Open houses, Sealed Bids & Gazumping

Some areas are already looking overheated. Where prices are very high in relation to earnings.

You see, there is no doubt the recovery is in full swing. The majority of regions have seen prices jump over the past year, from a 17 per cent rise in London to a 2.9 per cent increase in the North East.

New data from Nationwide shows average house prices in the UK stand at £180, 264, up 9.5 per cent over the last 12 months. Comparing this to last year, where the average price was £164, 630.

Six Waves Rippling Out

You see, price rises can be boxed into six key waves which are rippling out from the capital:

1.Central London, Brighton and Hove, Windsor, Maidenhead, Surrey. Up 25% since 2009:

Prime areas of London such as Chelsea and Kingston have seen prices soar by 76%, Hammersmith and Fulham by 73% and Westminster by 72%, leapfrogging the rest of the capital.

The knock on effect have seen neighbouring areas such as Windsor, Surrey, Maidenhead and Brighton and Hove jump by 31%.

2.Hertfordshire, Oxfordshire, Bristol, Bath and north-east Somerset. Up between 20-25%:

The ripple effect has stretched to Hertfordshire, north of Oxford and towards the Midlands. Many properties which were struggling on the open market 12 months ago - now have several buyers chasing them. The market which was struggling to gasp air has now started to breathe more easily.

Although Bath and Somerset prices usually lag around 6 months behind the capital, buyers usually think they can take advantage of the big price gap. But they often forget that the area is hotspot in a cooler zone.

3. Cambridgeshire, Hampshire, South Gloucestershire, Poole, Dorset Southend-on-Sea. Up 15-20%:

The new kid on the block is Southend, where prices started increasing 12 months ago. The area is influxed by inward investment, and a revamped airport making it the fastest growing area in the country.

Buyers are suddenly becoming aware of it’s a lovely destination, with a traditional seaside and travel proximity of less than 40 miles from London. Then again, it always has been this way.

4. Northamptonshire, East Sussex, Rutland, Warwickshire, York, Solihull, Norfolk, Trafford, Cardiff. Up 10-15%:

York has seen promising changes recently particularly because of great rail connections, outstanding university and because of its cathedral heritage. The icing on the cake is you can pretty much buy a property for around 10-15% of what it costs in central London.

The 5 year downturn slump changed in Northampton last year. The bottom end of the market is seeing signs of life & recovery and buyers are feeling more optimistic about the housing market and are getting in now for the surety it will keep its value in the long term.

5. Coventry, Cornwall, Devon, Herefordshire, Derbyshire. Up by 5-10%:

It’s been a long time in the making, but areas of Herefordshire and Shropshire are seeing the bright stars aligning.

It still has a long way to go, as areas are still seeing price reductions, but the picture is clear: the property chasm is opening.

6: Sheffield, Newcastle-upon-Tyne, North Tyneside. Not much change:

The central belt across these regions is still suffering from the economic crash. Very hard to quantify in real terms, but the long term effects are still being heard.

York & Trafford is a different story. The market is alive and well. As there is an influx of keen buyers wanting to climb the next rung of the property ladder.

So The Rumour Mill Is Back In Action

Increased activity in the economy has meant the housing market has turned a corner, and it’s rippling out. Fast.

If you didn’t put your contrarian hat on during the last slump, now is the time to focus on what really matters.

Because there’s still money to be made here and now. The Bank of England has no intention of pricking the housing bubble (just yet).

If you haven’t considered investing in the big ‘Buy to let boom’ yet, where prices are still ‘cheap’ in certain areas, I think you’re missing out one of the biggest bull markets going.

There’s still time to catch a lot of upside from this phenomenon – but I advise you to move quick.

Watch this space.

Mark Homer

Co-founder at Progressive Property, 600 + properties bought & sold.
Full time property investor/analyst/geek & World Record Holder

Author of No.1 Amazon best-selling book Uncommon Sense, Low Cost High Life and Commercial Property Conversions.

About Mark

Co-founder at Progressive Property, 600 + properties bought & sold. Full time property investor/analyst/geek & World Record Holder Author of No.1 Amazon best-selling book Uncommon Sense, Low Cost High Life and Commercial Property Conversions.

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