London and the Home Counties: Paying a Premium?

You say the word ‘London’ in regards to property, whether it be property to buy or rent, and you immediately know that it is associated with a high price tag. Unless you are the CEO of your corporation or a business executive you can pretty much assume that it is not going to be possible to live there as a first time buyer or even a renter, but are the Home Counties any easier?

The Home Counties include: Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent, Surrey and Sussex and are named so due to their location bordering London (Sussex is the only exception), and have quickly become a favourite amongst commuters. One of the benefits of working in London is often higher wages than that of the surrounding areas and the rest of the country (although this is not always applicable in all circumstances) and by living on the commuter belt of the Home Counties has previously meant many could afford to buy a more reasonably priced home than if buying in the capital.

The Home Counties offer so much to the average buyer and renter, close links into the capital while enjoying the benefits of small town, sometimes even rural, living but also able be in London within an hour in most cases, making this a great choice for city workers. The commute vs higher wages vs more affordable housing than in London has often won, with many Londoners running for the countryside towns of the Home Counties. However, this sudden influx of wealthier inhabitants is resulting in a rise in the cost of living in these locations, with the average cost of a house in West Sussex around £225,000 in 2014. But is this making the Home Counties harder and harder for those who do not working in London and are looking to buy their first home or even rent a home in these areas? With rising house prices, stringent rules on buying and many needing larger deposits to secure their first home versus stagnating wages means first time buyers everywhere are struggling.

In the Home Counties property is being pushed beyond its premium and it is the first time buyers who find themselves working outside the capital, along with many who work within it too, are struggling to get themselves on the property ladder.

It is not just the buying market which is suffering, the rental market is also finding itself in a boom, which is great for landlords but for those who cannot afford to gather a deposit for their first home and rely on the rental market, the rising prices is making it increasingly difficult to establish roots. In the first six months of 2015 the cost of renting in the Home Counties rose 5.4% and was mostly pushed up by city workers and international tenants relocating, often business executives, all favouring the London commuter belt with its many perks while still having all the benefits of working in the city. As mentioned above, London comes with a high price tag of its own when purchasing or renting property but now it is feared that these high prices are spreading outwards along the city commuter belt and making it difficult for young people to get on the property ladder.

With these rise in living costs across the South East it is now becoming apparent the living in the Home Counties, along the city commuter belt, is no longer a more affordable alternative to living in London itself and in turn is pushing first time buyers and renters out of the market in the Home Counties altogether.