Leading online estate agent, eMoov.co.uk, has taken a look at the London property market over the last year and highlighted which boroughs are home to London’s unluckiest homeowners.
It’s a fairly certain assumption that investing in a property in the capital is going to yield a return due to the ever inflating price of London property. Latest figures from the Office for National Statistics show that since August of last year, the average London house price has increased by 13%, a cash value of over £50,000.
This is 4% higher than the UK as a whole where prices have risen by 9%, although this still translates to a notable £17,376 increase in value.
The London Borough of Newham has been the place to be in terms of property. The average house price across the borough is £355,950, not exactly affordable, but much more affordable than the majority of the capital with only Havering, Bexley and Barking and Dagenham offering a cheaper option. It has also seen an increase in property values of 21% over the last year, the highest across the whole of capital.
But not every borough across the capital has seen its homeowners make a return on their investment over the last 12 months, with just two boroughs having seen its property drop in value.
Hammersmith and Fulham has suffered a decrease of -3% which translates to an eye-watering £24,407. With homeowners having paid on average £770,977 last year, the average property price now sits at £746,570, still some £200k+ more than the London average but little comfort for those who have lost money.
However, London’s unluckiest homeowners are those residing in the Royal Borough of Kensington and Chelsea. Unlucky might not be the word that spring to mind for London’s most well-heeled homeowners, who a year ago splashed out nearly £1.3m for the average property in the borough.
But since then a mixture of stamp duty changes, a lack of foreign buyers and the final nail in the coffin of the Brexit vote, have hit the high-end market hard with prices dropping -6% when compared to this time last year. Although it probably won’t be missed by the majority, a loss of over £80,000 in just 12 months is likely to leave a sour taste in the mouths of those that have invested in one of London’s most prestigious property markets, yet seen the rest of London increase in value around them.
To put it into perspective, that loss is only marginally lower than the average yearly salary of a banking director! (£88,701)
It comes as no surprise that the only two boroughs to have seen a decrease in values over the last year are two of London’s prime central boroughs. Despite a lot of attempted smoke and mirrors by high street agents in those areas, the decline of London’s most prestigious property markets has been evident for a while now.
The most prominent factors in this decline have been the changes to stamp duty for buy to let and second homes, as well as the reduction of foreign interest in that particular area of London.
With the capital suffering from an extreme shortage in terms of the supply of housing, some might argue that this might not be a bad thing. If this can go some way in levelling the playing field these properties could potentially be bought by someone who will actually use them as they are intended, as houses to live in all year round.Russell Quirk