How to make all your financial worries disappear in one simple move

I’m rather longingly reading through Knight Frank’s London vs Country brochure for this spring. It makes the point that we have been trying to make for the last year or so –that the gap between country house prices and London house prices has almost never been wider. So if you are going to move you are unlikely to find a better time to make the trade.

Some numbers. Average prices for good homes in London are up 24% on their pre-crisis peak. Those in the country are still down on average some 20%. Since 2009, things are even more stark – the average prime central London price is up 57%, but prices elsewhere have barely budged.

Knight Frank has rather brilliantly illustrated this by looking at what might have happened to the price of a £1m house in London, and then at what might have happened to those in various parts of the country.

A £1m house in London in 2009 should now be worth £1.57m. But a £1m house in the north east will now be worth only £909,000. That’s a difference of £661,000. So you can sell what was a million pound house and buy what was a million pound house but still have £600,000  in the bank – enough to fill most pensions and pay most families school fees.

You can do the same sum in most places (Herefordshire offers particularly good relative value) and get a similar answer, with the gap only really narrowing in the south east, where the difference in today’s values falls to a mere £425,500.

Not everyone can leave London – and if both members of a couple have to commute in, the higher transport costs can fast outweigh the lower property costs. But if you can, and want to, the numbers are surely telling you now is a good time. More on this from my colleague Matthew here.

  • Impromptu

    If people want to make the move, this seems fine.
    Personally, I’ve felt for some years that moving out of London is a one-way ticket. That sentiment may well be part of the house price dynamic.

  • Boris MacDonut

    Is this an appeal for the handful of rich Brits still living in London to move out and share their largesse while leaving SW postcodes to the Russians ,Chinese and Arabs?
    At the 2011 census only 40% of Londoners were British born it is much lower among the wealthy elite that use it as a playground close to their money.
    The London and the Brummie accents now dominate in South Devon and North Devon is running out of old farms and barns for the rich to convert. Take a look at James Ravilious’ photographs of Winkleigh etc… only taken in 1980 but a World away in culture and time.

  • Yodaboy

    Sadly this only applies to the London based minority most of whom make a fat living creaming off the hard earned savings of those who live in the real Great Britain. Time to review my subscription to Money Week.

  • Yodaboy

    Actually, this short article really defines what sort of person Merryn is & represents, especially when you read her biography – click on her name & have a read!

  • Natalie

    Thanks Merryn. Now can you write an article under the same title that covers the majority of the people in the country?

    i.e. those that don’t live in London.

  • Tax slave

    Why not move a little further out to cleanse a few more financial worries. Move to Italy and CGT is zero after 5 years of ownership and Inheritance tax is only 4% after you have given each of your offspring 1million Euros IHT free. Oh and the wine is cheap. Oh and so is the property, if you are sensible. The big problem is the price of petrol; but with all that good weather, do you really want to be racing around like a Topgear wannabe? Result = Financial worries easily reduced.

  • Yodaboy

    So Merryn, earn your salary and justify your position by telling us how, when you happen to live and work in the North East, we can make all our financial worries disappear in one simple move. You see, in case you have missed this minor detail, the vast majority of people who live in this country do not live in London or even the South East. So please tell the hard working of this country how we to can do absolutely nothing and make our financial worries disappear just by retiring and moving.

    PS. I trust you will have the very basic decency to answer questions to items you posted in your blog rather than spend your time thumbing through London vs Country.