Twenty years on: house prices in nine London boroughs have risen by more than 500 per cent in two decades
The biggest increase in UK house prices over the past 20 years continues to be seen in the capital, with nine London boroughs in the top 10 areas for price rises since 1997.
The scale of transformation across east and south-east London over the past 20 years continues to be reflected by soaring house prices in these rapidly-changing parts of the capital.
New transport links, rising demand and lack of affordable housing supply means today’s would-be home buyers are facing prices up to eight times higher than they were two decades ago, according to new research by Halifax which reveals the 10 areas where property prices per square metre have risen the most since 1997.
Nine of the 10 areas that have seen the biggest increases over the last 20 years are in the capital.
In the east London borough of Hackney, the findings reveal average square metre prices have leapt from £814 in 1997 to £6,942 this year, an increase of 753 per cent in two decades. This has pushed the average cost of buying a home in the borough above half a million pounds, at £526,835.
This is nearly twice the 402 per cent growth seen in Greater London in the same period.
Newham, also in east London, has seen the second biggest increase with average property prices per square metre up by 676 per cent in 20 years, followed by Southwark (644%) and Lewisham (618%).
The north-east London borough of Waltham Forest saw the biggest recent price growth, with average prices soaring by 93 per cent to £447,979 in the past five years.
PRICE COMPARISON BY SQUARE METRE: WHY IT WORKS
The report, which compares house prices in 32 London boroughs and more than 300 towns across the country, measures house price growth in each area by dividing the average property price by the average square metre measurement of every home, excluding outside space.
“House price per square metre can be a useful measure for house price comparison as it helps to adjust for differences in the size and type of properties between locations,” says Russell Galley, Managing Director of Halifax.
HOW THE REST OF THE COUNTRY COMPARES
Hove is the only town outside of Greater London to make the top 10 list. Outside southern England, 12 towns have recorded price gains in excess of the national average since 1997.
“Unsurprisingly, there are parts of central London that are substantially more expensive than anywhere else in the country,” says Galley.
“Over the last 20 years the gap between southern England, particularly London, and the rest of the country has increased substantially — a trend that has continued during the last five years.”
TWENTY YEARS ON: WHERE ARE WE NOW?
While double-digit growth has sent property prices spiralling in recent years, a gradual slow down is being seen across London and the UK following a year of political and economic uncertainty. Wage increases have failed to keep up with house price rises over the past five years, so it’s no surprise that buyers have hit their price ceiling.
The average UK sold property price increased by 4.7 per cent to £221,000 in July, slower than in the same period of last year but consistent with price growth so far this year.
By contrast, the average London house price rose by three per cent, to £481,000 over the same period, according to the most recent figures from the Office of National Statistics (ONS).
PwC senior economist, Richard Snook says the latest housing market data from the ONS and Land Registry “shows a gradual slowdown of house price growth, in line with our expectations that growth in 2017 will be around half that of 2016.”