At first glance, there appears to be little unusual about the British property market statistics between January 2014 and 2015. The value of properties rose by a healthy 7.9% in major UK cities, for example, while a final quarter slowdown ensured that prices increased by a token 1.1% towards the end of the year. Overall, this represented a robust return and one that lays the foundations for a healthy and prosperous market in 2015.
While these numbers tell one story, however, the truth behind them offers a fascinating insight into the contemporary property market. To begin with, the latest Hometrack city house price index breaks down the figures into geographical regions, revealing a considerable diversity of growth rates throughout the UK. While house price growth remained relatively low as 4.1% in Glasgow (where the typical residential property costs four times average earnings), the corresponding figure in Oxford and London reached an impressive 8.6% at its peak in 2014.
This is where we begin to observe a truly interesting trend. This is because the current data sets suggest that we are about to witness the cessation of the great British property divide, where the value of affluent homes in central London and surrounding regions rose at a disproportionate rate to those further north. While London remains the market leader in property value growth, the gap is being closed by quickly recovering cities such as London, Sheffield and Glasgow. Despite only emerging from the depths of economic recession two years ago, these locations are now growing at a proportionally quicker rate than those in the south.
In fact, property growth in the North of England can now be considered as the single most important engine for wider economic prosperity. This provides a stark contrast to the depths of the great recession, where negative equity and the threat of repossession in the north were central to the development of the quick house sale market and firms such as Property Rescue.
Undoubtedly, this trend is likely to continue with gusto in 2015, especially with prices in central and west London now having peaked. Even international investors are beginning to eschew London in favour of more affordable luxury homes, with properties in Birmingham and further north likely to serve as their primary targets.