"The South East is now in top position in the league table, having been absent for more than a decade."
e.surv analysed annual house prices on a regional basis in England and Wales for January, averaged over the three-month period of December 2021, and January and February 2022, compared to the same three months in 2020/21.
Four areas have seen an increase in their annual rate of growth, while six saw a fall. The four areas with an increase in rates are, in reverse order, Yorkshire and the Humber up 0.5% to 5.3%, the South West up 1.2% to 7.2%, Greater London up 2.1% to 8.0% and the South East up 1.9% to 11.7%. The South East is now in top position in the league table, after being absent for more than a decade, with the West Midlands falling to third place – having been in top place last month.
This is the first time that both Greater London and the South East have been included in the top four areas of house price growth since August 2020. Demand for properties after this date had tended to be outside of the south east corner of England, as lifestyle changes brought about by the pandemic tended to favour scenic open spaces in more rural areas or in coastal locations.
Overall, annual house price growth in February 2022 has eased slightly to 6.9%, having stood at 7.3% one month earlier – and has slowed considerably in comparison with the period in May/June 2021 of price growth of 14% outside London and the South East.
Wales currently has the second-highest price growth of the eleven GOR areas in Great Britain, and has been in one of the top three places for the past eight months.
In general, e.surv says there seems to be a north/south split developing across England and Wales, with the lower increase in prices being seen in the North East, at 1.2% growth, and the East Midlands and the North West at 2.8% and 3.3% respectively. These areas are followed by a grouping of Yorkshire and the Humber and the East of England, both with growth of 5.3%.
There is then growth of 7.2% in the South West, 8.0% in Greater London and 8.3% in the West Midlands. Wales continues with a high rate of 9.0%, just 0.2% lower than the previous month. Finally, the South East is the hot spot, at 11.7% – the only GOR area this month where growth is in double digits.
Richard Sexton, director at e.surv, commented: “This month’s data highlights the shifting change in attitude with regard to where and how we decide to live and work. The headline is about the return of Greater London and the South East to the top four areas of house price growth in our index for the first time since August 2020. The South East is now in top position in the league table, having been absent for more than a decade. There is good reason for this.
“There is a huge lack of supply in the market and yet, in many parts of the country, there is still high demand for properties that offer more space and a garden but also access to places of work. Our data is showing evidence now that while some areas, like Wales, continue to offer excellent value and rural living, we are seeing a demand for properties that offer a good working from home environment but remain in reach of our cities.
“Some commentators have pointed out that offices are well-liked working environments, and it is long journeys that deter people from commuting. It stands to reason then that the ‘perfect commute’ will command a good price and hybrid working arrangements will clearly benefit commuter belt towns. In our granular analysis of the South East, we see that Sevenoaks in Kent has a similar journey time to Woking of 35 minutes into London. The average house price in Sevenoaks is £605,000, which is similar to that of Woking at £603,000 and Epsom and Ewell, which again has a similar journey time and an average price of £595,489. This suggests that there is a close correlation between rail commuting times into Central London and house prices. If hybrid working is the future of office working then easy commuting will be an essential pre-requisite of many homebuyers.”
