Wider South East Q1 2022

Both sales and rental values continued to grow strongly across the wider South East in Q1.

Annual growth is now in excess of 10% for the sales market and around that level for rents, both of which are broadly in line with national average levels. At local level the highest rates of house price growth continue to be seen away from London and its traditional commuter areas – it will be interesting to see if this starts to shift back once greater proportions of workers return to the office.

South East sales market

Q1 saw price growth across the wider South East increase again, with the average rate well into double figures for all three component regions according to the latest Nationwide index results, shown in Table 1. Figure 1 below shows the trend back to 2006 – the combined wider SE measure has reached its highest level since 2014.

Table 1 – Regional House Prices, Q1 2022

Average valueAnnual change
East Anglia£277,000+14.2%
Outer South East£337,000+12.8%
Outer Met£422,000+11.4%
   
London£518,000+7.4%
UK£260,000+12.6%
Source: Nationwide House Price Index (values rounded to £1000)
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Figure 1 – House Price Growth: Wider SE, London and National

Source: Nationwide (Wider SE represented by average of ‘Outer Met’, ‘Outer SE’ and ‘East Anglia’ areas). Note: Quarterly regional series uses different UK figure to main monthly index.

The measure of London values relative to the wider South East continued to fall in Q1, although the pace of decrease slowed. London values were 1.50x those in the South East in Q1, compared to 1.51 in Q4. This is the lowest level since Q4 2012 and continues a falling trend since the peak of 1.75 in Q4 2015. The full data series is shown in Figure 2.

Figure 2 – Ratio of London to Wider South East Values

Source: Nationwide. (Wider SE represented by average of ‘Outer Met’, ‘Outer SE’ and ‘East Anglia’ areas).

The map below shows annual house price growth at local level across London and the wider South East. 71 of the 109 non-London districts are in the top 10%+ growth band, whereas this applies to only 3 of 33 London boroughs. Four London boroughs saw price falls in the year to February. Broadland in Norfolk recorded the highest rate of annual growth at 18.2%, followed by Babergh and Hastings.

Figure 3 – Annual House Price Growth at Local Authority Level, February 2022

Source: Land Registry, 3-month smoothed data.

South East Rental Market

Figure 4 shows rental growth data at regional and national level from the ONS. This is based on all rents paid so is slow to respond to changes in market conditions. Rental growth accelerated nationally and in all southern regions in Q1. The East continued to see the fastest growth on this measure, with an annual rate of 3.7% in March, with the South East at 2.8% also ahead of the national average (2.2%). Growth in London improved to +0.4% but it continued to lag the other regions.

Figure 4 – Rental Growth: Southern regions, London and National

Source: ONS Index of Private Housing Rental Prices

Analysis based on new lettings showed significantly higher levels of rental growth than the ONS indices. The pace of growth increased again in Q1 based on Homelet’s December index and stayed very high according to Rightmove.

Table 2 – Regional Rental Data, Q1 2022

Average rent*Annual change Q1 (Q4 21)
HomeletSouth East£1,148+5.7%                    (+3.5%)
 East of England£1,044+5.8%                    (+4.9%)
RightmoveSouth East£1,535+9.6%                    (+9.8%)
 East of England£1,331+10.3%                    (+9.8%)
Source: Homelet Index (actual achieved rents), Rightmove Rental Trends Tracker (asking rents)