Buying a property in London is now officially one of the best investments you can make.
Even one of the most catastrophic financial events — the 2007/2008 credit crisis — just looks like a tiny blip in the long term chart, despite the housing market turmoil in the rest of the country. Less than a couple of years after that seismic event, London property prices continued to rise.
Prices are now around double what they were during the credit crisis.
Everyone knows how house prices in London have soared above the rest of the country, but the true extent of the widening gap has been laid bare, with one area of the capital showing values increasing £1.5million in two decades.
Research by Lloyds Bank highlights how house prices in the exclusive borough of Kensington and Chelsea have shot up an eye-watering 648 per cent during the past 20 years. Today, a typical value of a home in the area is £1,857,287, up from £297,768 in 1996. It’s the equivalent of £6,498 per month or around £200 a day.
However, it is in the north London borough of Hackney where the steepest price rises have been seen. Values rose 702 per cent from £75,569 to £606,269 between 1996 and 2016, which equates to a rise of £530,700. The report found that homes in Westminster also rose sharply during the period, up 648 per cent from £190,428 to £1,424,388.
House prices have risen 617 per cent in Waltham Forest and 612 per cent in Newham. Both locations were in the six least expensive boroughs in 1996, but have since become two of the top five best performing areas. The report also suggested that values in these areas have been boosted by the Olympic Regeneration programme, improved travel links via the Dockland Light Railway and the Jubilee Line extension.
Andrew Mason, Lloyds Bank’s mortgage director, said: “The last 20 years have seen substantial growth in house prices in London, especially in the most affluent areas of the city. The boom years between 1996 and 2008 saw the gap widening between house prices at the top end of the market and those in London’s inner and outer boroughs, creating two distinct markets – “prime” and “mainstream”.
Mason went on: “While those boroughs at the top end have pulled away considerably from the rest of London and the country in terms of house prices, improved transport links to the city from the outer boroughs and the 2012 Olympic Games has meant that the boroughs directly benefitting from these have seen house price growth outpace the prime areas in recent years.”
The 10 most expensive places to live in London remain largely unchanged compared to 1996, the report suggested, with the two main exceptions being Southwark – which has moved up 10 places to ninth position – and Haringey – which has moved up two places to tenth. While Hackney is the biggest climber on the list, Bromley in Greater London has fallen most in the league table, dropping seven places from fourteenth to twenty-first place.
DMZ sees London as one of the prime property capitals of the world. Data consistently supports that buying a house in London will continue to reap benefits, with the UK Government continuing to invest in improving the Capital’s infrastructure (Crossrail, the Northern Line extension), it will continue to be an attractive location for foreign investment. More interestingly, London continues to have new and exciting neighbourhoods, attracting anyone lucky enough to be a first time buyer in addition to ‘generation rent’.