We take a look back over London’s property market after a volatile year, where outer London continues to outperform inner London in terms of price growth…
The east London borough of Havering tops the list of boroughs with the fastest house price growth this year, with the average cost of buying rocketing by £40,000 over the past 12 months. An 11.4 per cent increase has taken prices to an average of £392,000.
The borough, which is home to Romford, has hugely benefited from the ‘Crossrail effect‘, with the new station set to open in its main town at the end of 2018.
Since work began on the high-speed east-west line seven years ago, property prices along the route – that stretches from Shenfield and Abbey Wood to Reading – have been steadily rising and are expected to continue to outpace the rest of London following its opening.
2016 IN REVIEW
London’s property market is in a very different place to where it was this time last year according to Rightmove‘s latest House Price Index. In 2015, all of the top 10 fastest-rising boroughs had seen double-digit growth with prices rising by up to 30 per cent in some parts of the capital.
This year Havering is the only borough with growth above 10 per cent. South London’s Croydon makes it onto the list with a comparatively modest 6.6 per cent rise, which takes house prices to £419,000.
These boroughs have experienced an uplift in demand, as priced-out Londoners started looking to the furthest reaches of the capital where homes are around £200,000 cheaper than the capital’s average of £616,000.
Inner London vs Outer London
As such, eight boroughs out of ten are classed as ‘outer London’, including Enfield in the north and Hillingdon in the west.
The only two ‘inner’ boroughs to make it onto this year’s list are Lambeth in south London – home to up-coming areas Brixton, Streatham and the sought-after leafy enclave of west Dulwich – and the City of Westminster.
One to watch: Westminster
With homes averaging £1.9 million, Westminster has defied the Prime London trend of falling house prices. Areas such as Kensington and Chelsea have experienced losses of up to 14.7 per cent over the course of the year.
“Driven by the regeneration of Victoria, Westminster is experiencing an influx of new development,” explains Matthew Morton-Smith, Head of Savills Westminster.
“Traditionally Westminster has had a strong domestic market, and new developments and improved lifestyle benefits are creating a more diverse high-value prime market that offers a credible alternative to its more expensive neighbours.”
Westminster is the anomaly, however, and Rightmove predicts that inner London prices will fall by a further five per cent next year, while outer London prices will rise by three per cent.
“While sterling’s depreciation has helped to make things more attractive in inner London, the pressing need to purchase because of rising prices has disappeared. We therefore predict further price falls,” says Rightmove’s Miles Shipside.
“London’s desperate need for affordable housing has moved to outer London, and we forecast that will lead to further modest price growth in 2017.”