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Average house prices exceed £500k in 15% of Britain

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The number of property hotspots across the country with homes costing over half a million pounds has increased dramatically during the pandemic.

Research by estate agents Savills revealed that the number had increased by 50%, from 874 electoral districts in 2019 to 1,312 electoral districts in 2021. The figures were based on land register sale prices.

This means that the total proportion of areas where the average house price exceeds £500,000 has exceeded 15% of Britain for the first time.

This four-bedroom house in Bathford, three miles east of Bath, is for sale for £1.5million through Savillls

This four-bedroom house in Bathford, three miles east of Bath, is for sale for £1.5million through Savillls

Savills looked at areas in Britain with properties costing at least £500,000

Savills looked at areas in Britain with properties costing at least £500,000

The South West saw the biggest increase in sales of half a million pounds, up 167%, reflecting a surge in property prices in more rural areas.

The number of wards in traditional relocation and downsizing hotspots, such as the Cotswolds and Bath, has risen from 17 to 29.

They include Stow and Northleach, as well as Combe Down and Chew Valley West.

At the same time, areas such as South Hams and Cornwall have seen their numbers rise from 4 to 11.

Lucian Cook, of Savills, said: ‘The impetus to move throughout the pandemic – born of a desire for more space and spurred by the Government’s stamp duty holiday – has resulted in a skyrocketing prices for tiny homes across the country.

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“But with inventory in long favored hotspots across the country unable to meet increased demand, surrounding neighborhoods have also benefited.

“As a result, we have seen an increase in the number of new geographies crossing the half million pound threshold over the past two years.”

The increase in suburban and semi-suburban locations above the £500,000 threshold is most notable in London, with seven neighborhoods above the half-million-pound threshold in Croydon and a further eight in Waltham Forest.

Now nearly two-thirds – or 63% – of all areas of London are experiencing an average house price of £500,000 or more.

And a quarter of neighborhoods that have yet to hit the target in the capital are within £50,000 of that benchmark.

This five-bedroom house in the Cornish village of Tintagel is on sale for £1,199,950 via Jackie Stanley Estate Agents

This five-bedroom house in the Cornish village of Tintagel is on sale for £1,199,950 via Jackie Stanley Estate Agents

While the Northern regions still have the fewest number of half a million pound hotspots – the number in Yorkshire and the Humber has doubled in the past two years – from five to 10 (four located in Harrogate and one in Ryedale).

Savills’ research also revealed the emergence of the first £500,000 wards in the North East, with three wards in Ponteland and the Longhorsely ward joining the list.

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Meanwhile, Scotland is yet to register its first quarter of £500,000.

What does half a million pounds buy?

However, not all £500,000 homes are created equal and vary greatly in size across the country.

The largest can be had in the North East – at 2,017 square feet on average – compared to just 869 in London.

Despite this, the amount of space that half a million pounds can buy has only fallen by 2% over the past five years in London, compared to a 13% decline seen in the South West, West Midlands and the North West.

Locally, in Kensington and Chelsea, £500,000 buys 21 per cent more space than five years ago – although they still only buy 495 square feet – thanks to lower prices for real estate registered in central London in recent years.

York and Rushcliffe (Notts) buyers will have seen the opposite. In these two areas, the square footage that can be purchased for £500,000 has fallen by 13% to 1,432 square feet and 1,550 square feet respectively.

This two-bed terrace house in Stow on the Wold, Cheltenham, is on sale for £575,000 via Savills

This two-bed terrace house in Stow on the Wold, Cheltenham, is on sale for £575,000 via Savills

Mr Cook added: ‘The recent price increase also means that the range of options for those on smaller budgets is becoming increasingly limited, with even half a million pounds buying you more and more space. more reduced.

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“That said, the four successive rate hikes and rising cost of living should prompt more caution in the coming months, which means the rate of price growth will gradually slow, potentially into single digits. in the years to come – which comes as a welcome relief to many looking to take their next step.

The recent price increase means the range of options for those on a budget is becoming increasingly limited.

Rural and coastal areas have proven to be the most popular among house hunters during the pandemic.

Separate research from Rightmove found that some coastal hotspots had seen their asking prices rise by a quarter over the past year, with the Dorset hotspot of Canford Cliffs seeing asking values ​​rise by 24% last month compared to a year ago.

Rightmove’s Tim Bannister said: ‘From the start of the pandemic when the market reopened, we saw a huge increase in demand for these coastal areas as people wanted sea views or more space near on the side.

“There have been long periods where demand has greatly exceeded supply over the past two years, which has contributed to the significant rise in asking prices we are seeing today.”

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