The London housing market has always governed what happens to the rest of the country, mini booms to stagnating market places, price hikes to price crashes, but it hits different areas at different times, this is what is know as the “Ripple Effect”.Imagine a calm pond and throw a stone in it, the place the stone hits creates a large splash, this large splash is London, followed by a series of ripples emanating from the centre, progressively getting weaker and weaker as the ripples spread out.

For the sake of this article I am going to use the stone as a 2% price increase, but you can easily use it for a price crash or cooling market place. The stone hits central London where the average house price is currently £678,000, the average increase in price would be £13,560 and then the ripples start to spread out to other areas, the weakness of the ripples generally don’t effect the percentage price increase, but represent the values of property the further away from London you get.

For Example:

Hertfordshire – Average price = £514,000. Increase = £10,280

Warwickshire – Average price = £302,000. Increase = £6,040

Derbyshire – Average price = £210,000. Increase = £4200

Northumberland – Average price = £191,000. Increase = £3,800

Thankfully this doesn’t happen over night and the period of time varies due to many factors, including the amount of properties on the market in your chosen area, regeneration such as schools and transport facilities, seasonal effects and the dreaded budget.

My advice to you is always keep one eye on the London property market to help you prepare for the sale of your home or the purchase of a new one, after all making the right decision at the right time can save or make you thousands of pounds.