Average house price in London now £250,000 higher than the rest of the country
Recent data from Lloyd’s Bank has highlighted this by showing the difference in average prices between the two is now over a quarter-of-a-million pounds.
Specifically, Lloyds Bank’s research shows that despite the capital’s recent woes, the sharp house price rises in London over the past 20 years, mean values between the city and the rest of England and Wales has continued to grow. The difference between the two areas in 1996 was £33,834, but that has surged to £299,631 in 2016, and means London property prices are 107% higher than the average of the rest of England Wales, combined.
“London’s status as an international city and the businesses and tourism that attracts has seen demand for property there rise much faster than elsewhere in the UK,” said Pimlico estate agent, Andrew Reeves. “And, as we all know, when demand rises, so does value, making London property a very valuable commodity, particularly when compared with other parts of the UK.”
Within London itself, the increased demand for some boroughs compared with others is why there is now a market of two levels – Prime Central London and Mainstream.
Lloyds Bank’s figures show that in 2016 the difference between the two was some £1 million pounds, with the average price of Prime London residential property rising by 568% to £1.6 million from an average of £238,362 in 1996. The average price of a home across the rest of England and Wales, meanwhile, rose 290% from £71,433 in 1996 to £278,750 in 2016.
London’s safe-haven property investment status has arisen around the fairly reliable belief that property values in England’s capital city will continue to rise, even when the stock markets and other investment asset classes, aren’t. While this is being tested right now by Brexit and other global developments, those investors who are in it for the longer term, are unlikely to be disappointed.
“Brexit is undoubtedly presenting some bumps in the property investment road, due to uncertainty of what the future holds for London,” said Newington Green based estate agent, M&M Property. “However, once things settle down and more certainty over London’s place in a post-Brexit world is known, it’s allure will likely intensify again, which means businesses will still want a presence there.”
Sticking with the London divergence, another interesting detail was thrown up by Lloyds Bank’s data. Although the boroughs of Kensington & Chelsea, Westminster and Camden were the most expensive places to buy a home in 2016, the borough that has seen the largest increase in property values was Hackney, in North East London.
The average price of a home in Hackney has risen 702%, or £530,700 in 20 years, to reach £606,269 in 2016 from an average price of just £75,569, in 1996.
“A combination of affordability and regeneration have helped deliver that stellar level of price growth in Hackney over the past 20 years” said Assetgrove. “And, while some areas of Prime London are struggling to achieve the same prices seen a year or so ago, the relatively lower average value of property in Hackney, suggests prices there could rise further, particularly as investment in the area continues.”