Average house in London to cost £1million by 2030 but will it affect Leicestershire?

It has been reported that the average cost of a home in London will reach £1million by the year 2030. We caught up with Joint Managing Director, Mark Sandall to hear his thoughts on how this would affect Leicestershire's property market.

According to recent reports, the average price of a home in London could reach well over £1million by 2030, becoming even further out of grasp for the average UK resident.

The latest set of figures from the Office of National Statistics states that the average price of a London house is currently £490,000 compared with the national average which is almost half the price at £268,000.

In the run up to the election, London’s housing market slowed amid many buyers’ fears for the introduction of Mansion Tax, but the recent Conservative win has now reignited activity in the market.

So what does this mean for Leicestershire?

Previously, Leicester still seemed just be beyond the reach of ‘The London Effect’ but in recent months Leicestershire has already started to experience high demand for properties in commuter towns such as Market Harborough, Kettering and Wellingborough.

Our head of survey Geoff Milnes, says he expects house prices to rise further in the future driven by more buyers coming into the market, the continuing shortage of new homes and a knock on effect from the London property boom.

Geoff now expects house prices to rise, driven by more buyers coming into the market, the continuing shortage of new homes and a knock on effect from the London property boom.

He said: “We are seeing a number of buyers from London looking to purchase in Leicestershire and Rutland, driven out of the capital by spiralling prices, which are largely fuelled by foreign investors.

“What happens in London and the southeast has a knock on effect. As long as prices continue to rise there, we can expect they will in this part of the world too.”

The number of homes coming onto the market is set to increase too, as it did after the last election, but Mr Milnes said it was unlikely this would be enough to cause prices to fall as some reports have suggested.

Although demand for houses in these commuter towns has increased, in comparison to the many London workers who prefer to live in the city, commuters only make up a small percentage of London workers. At present there are far too few in number to have a significant effect on current Leicestershire house prices here but if London prices do escalate as studies predict, this could change dramatically.

Naturally no one can be certain what will happen to the UK market but Leicestershire locals can rest assured that average property prices are highly unlikely to reach the dizzying heights of £1million.