The price gap between property in London and the rest of the country has reached its widest point in history — an average home in the capital now costs more than two and a half times the price of a home elsewhere.
The record divide, revealed in data from the Land Registry, shows that a typical London property now costs £463,872 compared with £180,252 across England and Wales.
The phenomenon is explored in a new Channel 4 documentary, Million Pound Properties, which is being shown on Wednesday 15 April at 8pm.
It investigates what a seven-figure budget will buy across different parts of the UK. For example, for £1 million you can snap up a Scottish stately home, or an Islington council house. In Essex, what you pay for a mansion will buy a Thames houseboat in the capital.
Currently on the market with Miller Town & Country is a Grade II-listed, nine-bedroom manor house near Okehampton, Devon, featuring views across Dartmoor and four acres of grounds. It’s yours for £1 million. In London, Chase Apartments is offering a one-bedroom flat in King’s Cross for the same price.
“The simple fact is that London has become an ‘international city state’ and what is going on here bears no resemblance to what is happening in the rest of the country,” says Howard Elston, associate director at Aylesford International.
“If the influx of overseas money into London continues as it has done over the past decade, then the discrepancy will only get bigger and domestic buyers will have to move further out to find something they can afford.”
Home owners leaving London can, technically, profit from the equity their properties have built up. But buying agent Saul Empson of Haringtons UK says that, in reality, London’s stellar price rises mean home owners are reluctant to move.
This, he says, is partly because it costs so much to move and, if you do, you will have no chance of getting back to London if you change your mind.
As a result, owners are holding on to property, reducing the choice for buyers and ramping up prices.
“One of the most common complaints about the London market is the lack of good-quality homes,” says buying agent Caspar Harvard-Walls, a partner at Black Brick.
“Everybody wants to buy here because profits have been so high since 2008, compared to the rest of the UK. If you are one of the lucky people who own in London and have benefited from significant capital growth, why would you sell?
“Increasingly, we see families, who need or want to move out of the capital for more space and better schools, renting out their London home and renting in the country, while using the profit on their rent in London to pay the commuting costs.”
While the property price gap between London and elsewhere is likely to remain large for the foreseeable future, there is evidence that as price rises in the capital become steady, the gulf with the prime home counties will start to narrow.