Before we look at the main topic of this article, with a newly elected government it is worth looking at some historical data regarding which governments have been best for property prices in the UK, and which have been better for London property, compared to the rest of the UK. When looking at Prime Ministers that have managed to last four or more years in the UK over the past 50 years, it is rather worrying that only four of them have managed to achieve this (Thatcher, Major, Blair and Cameron).
Of those four, the PM that was best for UK property prices (Nationwide data) was Tony Blair (up 211% in 10 years), an average of 21% per year. For the Conservative PMs, Thatcher (16% per year), Cameron (4%) and Major (1%), faired much worse, giving the Tory leaders an annual average of 7% per year, which was three times less than the Labour leader Blair. This bodes well for UK property prices, assuming Starmer can remain in power for the full term.
However, all the previous PMs listed above also allowed London property prices to rise at a faster pace than the rest of the UK. London property prices increased 16 percentage points faster while Blair was in power and by an average of 21pp faster while the three Tory PMs were in Downing Street. But will that change this time around? The gap in average property prices between the north and the south could continue to close over the next five years, as it has been doing gradually over the past 10 years (London up 31% but UK up 41%, a gap of 10pp).
In early July, Nationwide reported that in the year to the end of June: ‘Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands), continued to outperform southern England, with prices up 2.4% year-on-year. Meanwhile southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 0.3% year-on-year fall.’
However, in this article we will look at whether the difference between property price growth is becoming less ‘north vs. south’ and more ‘urban vs. rural’.
London falling due to affordability issues
There is a clear split between England’s rural and urban areas when it comes to the price performance over the past 12 months, with the countryside very much outperforming the city, according to research released in June by Yopa.
