The Bank of England has an interest rate dilemma. It's under pressure to raise rates to cool the rise in house prices in London and south east England, but wages aren't growing as quickly as it expected. A whole village on Devon's south coast recently sold for the less than the price of some London houses, highlighting the disparity between property prices across the country. Hayley Platt reports
Picture postcard pretty. Devon on England's South coast. Four hours away from London and a world away from city life. It's also where - unusually - an entire village came up for sale. Bantham Beach recently sold for an estimated £14 million. Resident Peter Weedy said it attracted a lot of attention. SOUNDBITE: Peter Weedy, resident of Bantham Beach, saying (English): "Although one doesn't have a large country house to go with the estate, it is a unique area of outstanding natural beauty." Bantham had been owned by the same family for generations. It comes complete with its own beach, village shop including post office, a row of thatched cottages and even its own own golf course. It's a lot of bang for your buck compared with the prime London market. Houses on Bishops Avenue in North London can cost as much as five times that. Much of central London real estate is now foreign-owned. Money's poured in from Russian oligarchs to U.S. technology titans. Of course not all London properties cost millions. The average price is currently around £400,000. Ray Boulger from mortgage specialists John Charcol says tougher lending regulations mean many are finding it increasingly harder to buy. SOUNDBITE: Ray Boulger, Senior Technical manager, John Charcol, saying (English): "Previously lenders focussed very much on income and only on expenditure items like debt repayments, maintenance payments etc. Now they're looking much more closely on other expenditure items and one gets cases where lenders are rejecting an application after seeing the bank statements due to even seeing quite small payments on them." In the last year London property prices have shot up 26 percent as demand outstrips supply. That's pushing some people to look further afield. SOUNDBITE: Ray Boulger, Senior Technical manager, John Charcol, saying (English): "The disparity between London and the rest of the country is at a record level and you get to a stage where people who are living in London think well with the sort of price differential then perhaps it's worth while selling up in London and moving either to the outer reaches of London or a bit further out." House prices in London now finally look to be cooling. That may be good news for Bantham residents, who may want to keep their little slice of paradise to themselves while they can.