'Divide is growing' between top and bottom of UK housing
The UK property market is witnessing a growing divide between the top end and the rest of the market at present, it has been claimed.
Roger Southam, chairman and chief executive at Chainbow, said there is little sign of abatement in investment in the top end of the UK market, with London in particular continuing to attract significant interest.
However, the banks remain reticent to lend to the majority of the public and therefore access to cash for investment in the lower ends of the sector is somewhat drying up.
Mr Southam commented: "The important factor is recognising that - as there are two markets in London and the rest of UK. There are two markets in London and the gulf could be growing."
He added that the main reason that the capital is seeing such a boost in values at a time when the rest of the property market is on something of a downer lies predominantly with the wealthy investors who continue to see London as the most sensible place to put their money for the time being, due to the shortage of stock, increasing demand and increasing rents.
This may not be the case forever though, as the rest of the market could begin to close this gap if a sustained recovery were to take off over the coming months.
According to Selwyn Lim, director of Mouseprice, the UK property sector is being viewed as an increasingly safe haven in terms of property by international investors.
Given the present economic issues facing the eurozone, many overseas investors are pumping funds into the UK property market - particularly the capital - and this is having a positive impact on the market overall.
He added: "There are some positive effects on the areas immediately surrounding London, but that is probably just because as central London prices are pushed up, there is obviously going to be some knock-on effect on the immediate areas."
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