Thinking of quitting the capital for the country? Do it now

Regular readers will know that we think that property across much of the UK is still grossly overpriced. Inflation is doing its job, of course, and house prices are falling steadily in real terms – and often in nominal terms too – across the country. However, there is a way to go before we’d want to step in as investors in most places.

That said, two articles in the weekend papers make the point that if you already own property, it isn’t so much the absolute price as the value of the trade you make that counts.

Take the difference between London prices and prime country prices. Since 2007, London prices have soared (up 9.4% in 2012 alone, according to Knight Frank) while prices of nice houses outside London have fallen (down 4.3% in 2012). So sell your London house to buy in the country today and you’ll get a much, much nicer manor than you would have in 2007, when the gap between the two was rather smaller.

The Telegraph offers some tempting examples. In Islington, £650,000 buys you a two-bedroom flat on the ground floor looking out over a busy road. In Loxton in Somerset, it gives you a four-bedroom house with an acre of land and £30,000 to spare (although you will find your stamp duty takes care of most of that). In Rye, East Sussex, it gets you the middle class dream (The Old Vicarage) – a Grade II house dating from 1600 with “pretty cottage gardens” and fabulous views. Oh, and £65,000 left over.

In the FT, Francesca Steel makes the same point about the differential between Edinburgh prices and London prices. In Edinburgh, prime property prices are down 18% from their peak, and there has apparently “rarely, if ever, been a bigger gap between values in prime London and prime Scotland.”

This is, in turn, “fuelling renewed interest from buyers outside Scotland” as well as non UK buyers – according to Knight Frank 10% of prime property buyers are now foreign. Even the Russians are arriving: Steel points to four £2m+ sales to Russian buyers in the last year.

Clearly there is good reason for London prices to be outpacing other regions (safe haven demand, cash buyers, etc, etc) and the widening gap between the capital and the rest doesn’t for a second mean that prices in the former aren’t going to start falling, or that those in the latter aren’t likely to keep falling. Far from it.

But if you plan to sell a house in London and buy one elsewhere at some point, you may find that now is an excellent time to do it.  It isn’t about the actual prices, it’s about the gap between the prices.

  • dr ray

    If you want a big house it is a very good time to sell up in London and move to the country but while many people dream of a big country house, as an owner of such a house, I can tell you they are cheap for a reason.
    If one wants somewhere to live one buys the smallest one is comfortable in near where you work because that means that your heating, maintenance and travel costs will be low. If one wants an investment one buys a small property in an expensive area or a cheap property in a poor area if its for rent. The big 7 bedroom listed property in the country doesn’t fit the bill for anything. You can’t even retire to such a property because they need continuous maintenance and you get fleeced by tradepeople who think you must be rich.
    My property (Grade II listed 8 bedroom with stables and 3 acres) is worth more if it burnt down

  • PreviousPredictions

    Every article on London house prices from this commentator has been wrong, misleading or both.

    Nonsense from June 2011:

    A blatant attempt to mislead from September 2010:


  • dr ray

    Hi Pikey

    I bet you you don’t need to apply for permission to paint your front door and don’t spend all your free time in summer up a ladder fixing the roof or chopping logs so that you can have at least one warm room in winter.
    For these benefits I pay £6000 pa in pretax income council tax

  • pikey

    Dr ray

    The grass is aways greener, isnt it?

    Everyone has a choice, a road to travel and for many now they will be locked into a job they hate just to suport the 2 bed semi they have out grown.

    Feel lucky in your out come as many will now never be able to afford a ticket

  • pikey

    Dr ray,

    Although 6k is a bit excessive (after 40% tax £3600, dosnt sound bad for 8 bedrooms), you must have alot of bins and alot of kids!

    I dont believe in poll tax.

    PreviousPredictions dont be a fool they advise their opions and its upto to you to decide!

  • chris

    ‘Safe haven demand’ in London? – Does it have a different tax / legal system from the rest of the UK / England ? No. But correct me if I’m wrong…

  • Dr Ray

    Yes everyone has a choice. What I am saying is that I made the wrong one and the house has become a millstone around my neck. I sold a two bedroom flat in a reasonable part of London 20 years ago to buy my house and now the flat is worth much more than my house and I would have had my free time to enjoy for the last 20 years if I still lived in my London flat.
    And no, I don’t have a lot of bins – just one black bag and one recycling bag a week and about one policeman to cover about 200 sq miles. The fire station is miles away too so its not all bad!

  • pikey


    Time to go traveling

    Everyone makes mistakes but it sounds to me you need a presciption in an insite to life.
    I did my travelling in my 20’s, europe, Australia, USA and infilled with Egypt and the Caribbean. I met and enjoyed all people from all nations and all ages. I hope when iv retired to fling myself open to the rest of he world.

    It seems to me, in your trade you can have any adventure you want anywhere in the world, helping and making a real difference.

    Its not all about money and London

  • JT

    Pikey – this is a personal finance website (the clue’s in the title), so on here it IS actually all about money. If that’s not your thing you can always try Conde Nast Traveller or the New Statesman. You might even find Boris on the latter.

  • pikey


    It not all about stats, sometimes you got to read between the lines.

    Open your eyes JT and even you might see a good investment

  • RB

    Enjoyed reading the comments to date, and would absolutely agree that industry professionals et al are not always, if ever, correct. I say this, having just read predictions for 2012, all of which were 100% wrong with regard to the London property market!