Central London’s priced-out families continue to boost house prices in the capital’s south and east outer boroughs.
The average cost of buying a house in London was £486,000 at the start of 2018, according to the latest sold house price figures.
This was £10,000 higher than the average sold price the year before but was lower than 2017’s peak average sold price of £489,000 recorded in July, figures published by the Office for National Statistics (ONS) showed.
However, while the average increase in the cost of buying a home in London was 2.1 per cent, the cost of buying a home did not rise evenly throughout the capital, with more affordable outer boroughs attracting buyers priced out of the most expensive central areas.
South and east London’s outer boroughs saw the greatest house price growth in the year, with Redbridge, where the average house sold for £432,000, topping the table.
Sold prices rose 5.9 per cent in the year to January 2018 in the east-London borough which will have fast trains to central London and Heathrow on Crossrail from four stations at Ilford, Seven Kings, Goodmayes and Chadwell Heath when the line opens.
New transport links are also planned for the capital’s second best performing borough, Merton, which will get a new tram link running from South Wimbledon to Sutton from September.
House prices in the south-west London borough rose 5.6 per cent to £511,000.
Lewisham, Greenwich and Bexley, all in south-east London, completed the top three boroughs for house price rises.
“Whilst London posted a gain from £481,000 to £486,000 [from December to January] having been flat since the summer, this move does not change the general picture of soft performance in parts of London and the South East,” said Richard Snook, senior economist at PwC.
Despite the overall slight rise in house prices across London, sold prices fell in 11 of London’s 32 boroughs.
“We have found house prices to be rather volatile over the past few months — up a bit, then down a bit,” said north London estate agent Jeremy Leaf.
“No region reflects this pattern more than London, which is showing again that price rises are lagging behind most of the rest of the country, mainly due to previous overheating.”
The biggest falls in house price sales were in central London boroughs such as Camden, which saw a 4.0 per cent drop in house prices, and the City of London, where prices decreased by 7.9 per cent.
FIRST-TIME BUYERS IN LONDON
The average first home in London sold for £425,000, up 2.1 per cent on a year ago.
“With the Chancellor’s recent Spring Statement announcing that the exemption in Stamp Duty has helped over 60,000 first-time buyers, coupled with near record-low mortgage levels, market conditions are looking more favourable for those looking to make their first moves,” said Richard Sexton, director of Chartered Surveyors e.surv.
“However, this shouldn’t draw our attention away from the bigger picture. Our lack of supply continues to push prices up year-on-year and saving for a deposit is one of the biggest challenges would-be homeowners face.”