Property prices per square metre have risen by 432% in Greater London against a national average increase of 251% over the past two decades, according to new research from Halifax.
While the capital dominates the country’s list of most expensive property locations on a per square metre basis, five areas outside southern England fetch a higher property price per square metre than the national average of £2,216 – Solihull and Leamington Spa in West Midlands, Altrincham in the North West, Scotland’s capital, Edinburgh and Harrogate in Yorkshire.
There has been a substantial gap widening in property prices per square metre between southern England and the rest of Britain over the past 20 years. This has continued since 2011 with London gains nearly double that of the rest of the country.
The borough of Kensington and Chelsea remains Britain’s most expensive neighbourhood, with an average price of £11,321 per m². Despite dropping 1% lower than last year, it is more than five times the national average of £2,216. Kensington and Chelsea, along with Westminster (£10,552) are the only areas in Britain with an average price above £10,000 per m² followed by Camden at £9,012 per m². 17 areas – all in Greater London – have an average price in excess of £5,000 per m2; with the borough of Merton – South West London – a new addition to this group since last year.
Half of the 10 most expensive towns outside southern England are in the West Midlands. Solihull, with an average price of £2,661 per m2 and Leamington Spa (£2,645) are the two most expensive towns. The other West Midlands towns that made the top 10 include Sutton Coldfield (£2,113), Bromsgrove (£1,970) and Stourbridge (£1,943).
Meanwhile, five places outside southern England have average prices per m² above the national average of £2,216. In addition to Solihull and Leamington Spa, these include Altrincham in the North West (£2,634), Edinburgh (£2,355) and Harrogate (£2,342).
The research found that nowhere in Great Britain had an average price below £1,000 per m², but Airdrie in Scotland had the lowest average price at £1,019 per m², less than a tenth of the average price per square metre in Kensington and Chelsea.
Six of the 10 towns with the lowest prices per square metre are outside England, with four in Scotland: Airdrie (£1,019), Lanark (£1,040), Coatbridge (£1,071) and Kilmarnock (£1,120). Two are in Wales: Llanelli (£1,028) and Neath (£1,065). The four English towns with the lowest house prices on a per square metre basis are all in northern England – Scunthorpe (£1,036), Accrington (£1,055), Hartlepool (£1,062) and Wallasey (£1,067).
Chris Gowland, mortgages director at Halifax, said: “House price per square metre can be a useful comparison measure as it helps to adjust for differences in the size and type of properties between locations.
“We have seen the average price per square metre increase by 251% over the past 20 years from £631 in 1996 to £2,216 in 2016, although this national figure does conceal considerable regional differences.
“In particular, 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% 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.”
The 10 areas recording the highest house price growth on a per square metre basis over the last five years are all London boroughs. Waltham Forest, Greenwich and Lewisham all recorded the largest growth – 87% over the five-year period closely followed by Newham (82%).
Nationally, house prices per square metre have risen by 31% since 2011 from an average of £1,696 to £2,216 in 2016, with increases of at least 10% in all regions. Greater London has experienced substantially faster growth than elsewhere in Britain, with an average increase of 57%. The South East (32%) recorded the next greatest rise, while Scotland has seen the slightest rise (10%) during this period.
Nine of the 10 areas that have seen the biggest increases in price per square metre over the last 20 years are in London, with Hove making up the tenth. Hackney has seen the largest rise since 1996 with an increase of 821%, nearly twice the London average (432%).
Over the past two decades, only four towns outside southern England have recorded a price increase per square metre in excess of the national average. Leamington Spa (287%), Salford (276%), Rushden in Northamptonshire (267%) and Harrogate (257%).