Most of us would think that the property market in London has been going from strength to strength with prices increasing at unprecedented levels; however a report recently published by home.co.uk paints a different picture.
Research, looking at the price of London flats in 118 postal districts since 2008, shows that rather than what we are all told to believe that prices as a whole are increasing in London, however, the report highlights that only the most desirable areas are seeing these drastic increases.
As you would expect flats clearly dominate the private housing stock in highly urban environments, throughout the UK and the capital is no different. In Greater London, flats constitute nearly 46% of all property types. In Central London, flats actually represent 92% of the current sales stock. Whilst the top ten postal districts for flat price increases show over 100% since 2008, some areas such as SW8 are showing astonishing price rises; some flats have almost tripled in value in SW8 since 2008.
Not all areas are following this upward spiral and the worst performing areas for flat prices are as one would expect mostly located in North and East London. Surprisingly many flats in these areas have not as yet even recovered their pre-crisis values. Whilst these may not necessarily be the cheapest flats in the capital, they certainly appear on everyone’s list as amongst the more affordable areas.
The average price drop recorded since the collapse in 2008 across these ten districts is 11.9%. These are the areas which can offer some encouragement to first-time buyers and more significantly these same areas also provide the greatest opportunities for developers and buy-to-let investors. The lowest average price currently for a flat (£141,818) will be found in SE2 (Abbey Wood district) an area which has only shown marginal price growth of less than 1% since 2008.
Commenting on behalf of Home.co.uk, one of the Directors Doug Sheppard commented: “Flats are the natural choice of property for most first-time buyers. As the UK economy slowly recovers, first time buyers are increasingly determined to get their foot on the property ladder.”
“As we are aware affordable housing in London is not a new issue. This study highlights a dramatic diversity of price and availability depending on location, and the fact that there are still several parts of London that are not caught up in the current price escalation.”
“To confirm there are substantial price differences between areas, for example SW7 and SE2 then the differential for an average flat is over £3million and this is a startling reminder of the extreme diversity in property prices in London”.
This highlights in many ways the reality which is that as prices continue to rise in the more desirable/fashionable areas, then potential buyers will be forced to consider compromises both on the location and type of property in order to fit their budgets.