City landlords see buy to let prices rise by 65%

Monday, 24th October 2011

Slick property investors who sunk their cash in to buy to let in cities have seen their rental homes increase in value by 65 per cent in the past decade.

The average city home has soared in value by £68,236 or £131 a week since 2001, according to the Halifax Cities Review.

Homes are at the highest premium in Winchester, Hampshire, where they change hands at 77 per cent more than comparable properties throughout the rest of the county.

Portsmouth, also in Hampshire, is at the opposite end of the scale, with average house prices of around £141,871 – 31 per cent below the average for Hampshire of £205,610 and £20,476 below the Land Registry average home price for England and Wales of £162,347.

Westminster boasts the second highest premium at 74 per cent above average home prices for the rest of London.

Seven of the top 10 cities with the largest house price premiums are in the south. Lichfield, Staffordshire, is the best of the rest, with homes costing 58 per cent more than those in the rest of the county.

Suren Thiru, housing economist at Halifax, said: “With the housing demand and supply imbalance that characterises the UK property market often more acute within our major urban conurbations, homes in cities across the country are typically trading at a marked premium over neighbouring areas.”

“City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas, as well as by the pressures on the housing supply that often typify such locations.”

The Halifax study looked at house prices in each of the UK’s 66 cities, but omitted the City of London, St David’s and Bangor in Wales, plus Wells, Somerset, because they all had insufficient data for effective comparisons.