Property prices in the nation’s capital are down 0.3% year-on-year, according to the latest data from Zoopla, with the average property price in London standing at £536,000 and buyers paying 96% of the average asking price.
Across the UK, however, house prices rose to 2.1% last month, from 1.5% the month prior, the quickest rate since the end of 2022 according to property platform Nationwide, with the average UK house price in July standing at £266,334.
The historic demand for London property
According to a new study by the Institute for Fiscal Studies, house prices in London are £21,000 higher over five years than they would have been if the capital had kept pace with the rest of England’s. Historically, the demand for London property and the city’s population growth has outpaced its development. Over the 25-year period since 1996 the adult population of London grew by 29%, while the number of homes grew by only 23%.
Londoners have also faced other challenges, with £7,500 added to their annual mortgage bill since Liz Truss’s infamous mini budget, and many wanting to move home looking at restricted budgets, high interest rates and limited supply challenges.
Increasing buyer confidence
In a massive sigh of relief for London’s renters and homeowners, the Bank of England cut interest rates from 5.25% to 5% last week, marking the first cut since the start of the pandemic in March 2020. Increased buyer confidence can also be attributed to post General Election stability and some lenders introducing more attractive mortgage products with sub-4% rates. Analysts predict this will lead to increased demand and spending in the capital’s property market before the year is up.
Which London boroughs are outperforming others?
There are certain boroughs of London that are experiencing increased demand due to prestige, lifestyle opportunities and commuter convenience into the city.
Additionally, ongoing investment in infrastructure and regeneration projects has increased the appeal of these boroughs, attracting buyers seeking long-term value and potential capital appreciation. Projects like the Old Oak Common, a high-speed rail hub station regeneration plan for the Hammersmith and Fulham borough, plans to create thousands of new homes and jobs with the £50 billion rapid rail system proposed between London and the north of England.
As a result, Hammersmith and Fulham property has experienced an annual increase of 5.6% and a monthly increase of 0.1%. The average house price in the area was recorded at £1,010,417, making it the fourth most expensive out of all London boroughs.
Richmond upon Thames came in third, with an annual change of 5.6% and a monthly change of 1%, bringing the average home price to £949,555.
Westminster comes in with an annual change of 4.7%, but a monthly decrease of -0.7%. Home prices in the area average £1,526,159, making Westminster the second most expensive borough, behind Kensington and Chelsea.
How do London rent prices compare?
According to recent data Tower Hamlets has the highest average rent price this year at £2,229 per month, a rental trend that dates back to back to 2015, when the average rent price in the borough was £1,731 per month.
The data has also revealed that Havering has the lowest average rent price at £1,375 per month, with Barking and Dagenham averaging £1,425 per month.
According to Rightmove, London has not escaped the national rental crisis, with rents in the capital rising 4% from a year ago in May, and some rents averaging close to £2,500 a month.
The nation’s capital offers an exciting opportunity to invest in some of the most historic, conveniently located and sought after property in the United Kingdom. That said, consulting with a professional ensures that you can protect your assets while maximising on an exciting market opportunity and pursuing your financial and property goals with peace of mind.
Get in touch today to consult with one of Tailor my Property’s expert network of property, finance and investment professionals.
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