Prices of homes in Kensington and Chelsea are 1,500% more than Blaenau Gwent in Wales emphasising the divide across the country.

Data from the Office for National Statistics (ONS) reveal significant gaps between the most expensive and cheapest areas from London’s Kensington and Chelsea the highest and Blaenau Gwent in Wales the lowest.

In Kensington and Chelsea, house prices are 1,500% higher than in Blaenau Gwent in Wales. This is the largest gap in over 20 years, since before records began, where the gap was only 516%.

The average house prices in Kensington and Chelsea were £1,195,000 whereas in Blaenau Gwent the average house price was only £75,000.

One advantage of rising house prices for homeowners in London is remortgage buyers have the opportunity to extend their mortgage to release capital for home improvements.

House price gap increasing

The previous peak was before the financial crisis, in 2002, where the gap was almost 1400%. However, whilst prices collapsed across the country, London prices kept on rising, and so now they are even higher than their pre-crisis peak.

The rise in London prices has made it harder to secure mortgages for first time buyers, home movers and requiring buy-to-let landlords to have larger deposits or higher rental incomes.

The ONS also consider the Middle Layer Super Output Areas (MSOAs) where the gap is even more obscenely large. These are places within the local authorities with at least 5,000 residents, 3,000 household with an average population size of 7,500.

In Knightsbridge, an area of Westminster in London, the average price of a house was £3.4m which is nearly 100 times that of the cheapest area, in one part of Middlesbrough which only averages out to £39,000.

The difference between the most and least expensive has almost quadrupled since 1995, where in Westminster prices were £327,000 and in an area of Sheffield, prices were only £13,500 or 24 times higher.

Older homeowners with considerable value in their property offers the equity release mortgage buyer access to cash using a lifetime mortgage to buy a more expensive home or even reduce inheritance tax owed by your beneficiaries.

Prices rising across the country

London escaped the worst decrease in property prices during the financial crisis and have increased at a faster rate in the recovery.

The ONS figures show that between 2013 and 2014 the median house price of 336 local authorities has increased with only six decreasing and six remaining unchanged.

The local authority with the largest increase is South Bucks rising 23% from £390,000 to £480,000 compared the largest decrease is Isles of Scilly decreasing by 15% from £275,000 to £235,000.

London has benefitted from foreign cash investors buying prime central London properties boosting prices, especially of expensive homes.

In contrast the traditional buyer requiring a mortgage such as first time buyers, home movers and buy-to-let landlords had been restricted by the supply of mortgage products from lenders and new regulations introduced around affordability.

This imbalance has helped to created a larger than expected gap between the most expensive and cheapest properties in the country.

What are your next steps?

Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth for home or garden improvements and holidays.

Learn more by using the equity release calculator, property value tracker chart and mortgage monthly cost calculator. Start with a free mortgage quote or call us and we can take your details.

At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

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