London property price increases boosting rental market?
There are many reasons that London's rental property market has performed well over the course of the last few years. From the fact that more and more people are coming to work in London and want the freedom that the PRS affords them, to the increase in quality that landlords offer, renting is more popular now than it has ever been.
But is the price of buying a house, more than ever before, putting people off getting onto the ladder and instead pushing them towards a booming rental sector ' If the statistics released by Halifax are anything to go by, this may well be the case.
The lender said that over the course of the last two decades, the average property price in London has increased by a quite staggering 432 per cent, almost double the national average of 251 per cent. Prices accelerating this quickly could increasingly be turning potential buyers away from the sector, instead encouraging them to rent when they can't afford to buy.
Across the country, the average price to buy a home stands currently at some £2,216 per square metre. However, in London this is markedly higher, even coming in at over £10,000 per square metre in both Kensington and Chelsea and Westminster, with the former being the most expensive neighbourhood in the country thanks to its prices in excess of £11,000 per square metre.
What this could mean is that in the south in particular, inflated prices are helping to improve the PRS. With potential house buyers facing such high prices, especially compared to what buyers faced a generation ago, many give up on ever becoming homeowners and will look to rent properties instead.
Chris Gowland, mortgages director at the Halifax said: "There has been a marked widening in the North/South property divide over the past two decades as prices per square metre have risen by 432 per cent over this period in Greater London, more than twice the increase in areas outside of southern England. The consistent gap between southern England, led by London, and the rest of the country over the past two decades is a trend that has embedded itself throughout the last five years."