House Prices – Is it really worth paying extra to live in a popular area?
To live in a popular area, you’ve always needed to spend a bit extra when buying a new home. But apart from the social kudos of living in a trendy post code, is it really worth it?
A new report from PrimeLocation.com has found that house buyers who want to live close to one of the country’s top 100 state primary schools can expect to pay around an extra £90,000 on top of the countryâ€™s average house price of £218,000.
As well as living close to good schools, there are a number of other factors that can affect house prices. We’re going to look at some of the most common factors that affect house prices to help you decide whether paying extra to live in a popular post code is really worth it.
Proximity to Primary Schools
Primelocation.com’s recent report looked at house prices in the areas surrounding the top 100 state primary schools in England. Typical prices for homes near the top primary schools are on average 42% higher.
Schools in the East Midlands were found to add the biggest premium of 48% to average house prices, while the proximity to primary schools adds over 47% to house prices in Yorkshire and Humberside. Although house prices in London are significantly higher than in the rest of the UK, the premium in areas close to top-ranked primary schools is only 7.4%, the lowest in the country.
London and the South East
Living in the capital has always costed more than it does to live in regional parts of the UK. But why is this? First of all, demand for housing in London outstrips the the supply of houses, so sellers, to a certain extent, can dictate the price they want for their property.
The jobs market in London is bigger than anywhere else in the country so being situated within commutable distance from the capital means you can expect to pay a premium. This means that houses in the South East or in commuter towns like Haywards Heath often cost more than their northern counterparts.
Although living in or close to London offers significant benefits, particularly employment opportunities, if you’re self employed or simply don’t need to work in the capital, you could get significantly more bang for your buck by moving to the north.
The North-South divide in terms of house prices is very strong in the UK, with house prices more than twice as high in the south as in the north of England. According to the BBC, the average house price in the North is £138,000 whereas in London the average is significantly higher, at £406,000. House prices in the North have also fallen by 6% over the last year.
The ratio of house prices to income and mortgage payments is also more favourable in the north, with houses costing over 6 times the average yearly income in the London region, but only over 3 times the yearly income in the north.
It might be more affordable to buy a house in the north, but only if you can ensure that you will have a job or are self-employed. The economic recession has hit the north of England even more severely than the south, average wages are lower and unemployment levels are high. These factors have pushed down house prices, making them more affordable, however, only for those who have a regular income and can afford to pay.
The number of households has been rising in the UK and as this trend continues in the future, it will affect house prices by increasing demand. Some of these demographic factors that cause the increase in demand include higher divorce rates and more single people households, an increase in life expectancy and an ageing population. An increase in immigration both from within the EU and from outside the EU has also increased demand.
These demographic factors affect different regions asymmetrically, so will impact house prices across the UK differently. For example, the influx of immigrants usually affects London and the South East more than other UK regions, and population growth is also set to be concentrated to the London area.
This post was written by Britannia Movers International, one of the UK’s largest removal groups, offering UK removals, international removals, storage and business removal services.