Chelsea homes costliest, but buyers flock to East London boroughs
The latest UK House Price Index (UK HPI) calculated by the Office for National Statistics (ONS) shows that Kensington and Chelsea command the highest house prices in 2016 reaching an average of £1,317,424, registering an increase of 4.2 percent over 2015.
The two boroughs were followed by the City of Westminster where the average price of a house was £1,025,114, registering a modest rise of over 1.2 per cent year-on-year. Similarly, in Camden, houses prices increased by 8.8 per cent to reach £866,973.
This data clearly reaffirms the status of Central London and neighbouring boroughs as areas with the highest price for the UK. The findings are crucial because, during mid-2016, the UK property market witnessed turbulences in the wake of the nation exiting the EU and its resultant impact on the economy. There is no doubt that the housing market in London has bounced back because of its strong fundamentals, coupled with the demand for quality housing.
All the 33 boroughs of London have seen an increase in house prices with seven of them registering growth in double digits. There are some interesting developments, and they establish East London as the favourite destination of home-buyers as well as property investors.
For instance, Barking & Dagenham witnessed the highest growth in house prices for 2016 at 14.1 per cent. The average house price in that borough is £288,927, the cheapest among London boroughs. It means that the home-buyers, who are unable to afford houses in Central London or City of London, are now buying properties on the outskirts where the prices are negotiable.
A research report in 2016 had indicated that property buyers were moving out of Central London because quality homes were available for a quarter of the price of an average home in the hotspots.
This finding leads to another observation that the growth of house price is on the higher side in East London, which also includes Barking & Dagenham. In Newham, another borough in East London, house prices increased by 10.6 per cent to reach £353,476. Likewise, Havering registered 12.4 percent increase in price rise and now houses there cost £353,659. Other East London boroughs that witnessed appreciable growth in house prices over 2015 include Lewisham – £419,005 (+11.8 percent); Bexley – £334,634 (+13.1 percent); Redbridge – £404,344 (+9.6 percent); and Waltham Forest – £438,855 (+13.6 percent).
It is amply evident that homebuyers are flocking to East London because of its various advantages over the other boroughs, especially on price points. If the same trend continues, then, over the next 2-3 years, the East London boroughs will continue to witness higher growth in house prices. 2017 will be an interesting year for the London property market, as the trends for home buying are not yet available like in 2016.
Nevertheless, these latest findings reveal that London continues to remain a safe destination for investments in the residential property market. If you are interested in acquiring a quality home for owner-occupier purpose or rental income, Strawberry Star has several interesting options in East London. Hoola, our iconic project is set to become a landmark in the Royal Victoria Docks. Connect with any of our London property advisors/estate agents for a detailed insight into return on investment from Hoola and details of the properties available for sale.
Image: UK House Price Index England: December 2016