In the last 20 years, London house prices have ballooned above the rest of the country - but exactly how much have they risen by?
We've crunched the latest Land Registry data to reveal the average prices across all London boroughs and show where prices have shot up the most. We've also looked at which boroughs are performing the best today and whether London is still a good investment.
Let’s look back…
In 1997, the year of Blair and Brown, the average London home sold for £97,654. Today, according to the latest Land Registry data for February*, prices have soared 505% to an average of £591,216.
Let’s take a look at the change in London house prices between 1997 and 2017:
All London boroughs have seen extraordinary price growth over the past 20 years. City of Westminster has seen house prices hike up a mammoth 784.27% over the past two decades, from £200,169 in February 1997 to £1,770,037 in February 2017 - the fastest pace of price growth of any borough in London. Prime central London has typically been popular with wealthy overseas investors looking for a safe haven for investment.
Second is east London’s Hackney. Property prices here have grown by a staggering 678.95%, from just £75,210 in 1997 to £585,848 in February this year.
Investors here will not only benefit from potential capital gains, but also healthy rental yields as the area is in high demand with young professionals. Our Interactive Rental Yield Map shows a high 4.4% yield in Homerton around the station and the High Street, a 4.4% yield in Hackney Wick, a 4.2% yield in Lower Clapton and a healthy 4% yield around Hackney Central and Hackney Downs station.
Southwark is the borough with the third steepest price growth in house prices in London over the past 20 years - with prices in the south London borough rising by a whopping £550,000. SE1’s popularity has shot up in recent years, thanks to extensive generation around the Shard and infrastructure improvements such as the Thameslink upgrade and improvements to London Bridge station. It's super central, has a fascinating history and a vibrant foodie scene.
Have house prices reached their peak?
According to Land Registry’s latest figures, despite a 4.6% year on year average price increase from January ‘16 to January ’17 across the London boroughs, 8 out of the 33 boroughs saw house prices decrease.
Transactions across Greater London are critically low, and high-end home sales have dropped most sharply in London’s exclusive neighbourhoods. So although the average house price looks high for City of Westminster for February, and for many of London boroughs, this has to be taken with a pinch of salt due to the severely low transaction levels.
We are expecting to see some improvement in volume post-election, but at best we expect volume to track at -5% year on year to summer 2016, when volumes failed to recover after the stamp duty changes.
As a result of a critical lack of supply, stamp duty changes and political uncertainty surrounding Brexit and the upcoming General Election, prices may soften in prime central London. We expect London’s outer boroughs to perform much better however, but expect a much slower price growth rate than we have seen previously.
Certain London boroughs have experienced high house price rises year on year from February ’16 - February ’17, and are great investment hotspots: Barking & Dagenham (13.23%), Croydon (12.54%), Merton (12.23%), Newham (11.35%) and Haringey (11.33%).
Is London still a good investment?
If it’s an investment you’re after, then as long as you use the advice available to you, you can protect your assets and minimise any risk.
As our Regional Director, Mark Lawrinson, says, “If you want to invest in London property and benefit from capital appreciation, location is absolutely key. Buy in areas that are experiencing infrastructure investment or regeneration, that offer healthy yields so mortgage repayments aren’t a problem. As London has proven in the past when it bounced back from the recession, it’s an extremely resilient city, so if you are buying with a medium to long-term view then your investment as a business or home is safe.”
Here’s where to buy in Zones 3 and 4 as suggested by property expert Mark Lawrinson.
How much is your house currently worth?
Find out if your house or rental property has gone up in value in 60 seconds with our Instant Valuation tool. Or, if you’d like any advice or information on our services, give us a call on 0207 099 4000.
*Publically available Land Registry data taken 16/05/17. LR data is updated every month and so data will continue to be updated and therefore the final numbers are subject to change.